Example: a owner of a house has insurable interest inhis

House. He may insure against loss of fire. The risk

Of getting the house burnt is the insurable interest.
Policy without insurable interest is void- S152-in
Cases of life insurance,the policy shall be void unless
The person affecting the insurance has an insurable
Interest in that life at the time the insurance was
Effected.

Policy money shall not exceed amount of insurable

Interest.
Principle of insurable interest discussed in Nanyang
Insurance Co.Ltd v Salbiah & Anor
Facts: An agreement was entered between one Abd
Karim and the registered owner of the car(Lau
Teck Siew). Karim was asked to make an initial
payment of RM1,000 and orally agreed to pay
by way of

installments. Car was lent to Abd Karim until

he paid up instalments and then an HP
agreement would be entered into with a finance
company. He met with an accident driving the
car. Nanyang Insurance (on behalf of Lau Teck
Siew) were ordered to pay damages.
Issue: whether the insured (Lau Teck Siew) still
Have insurable interest in the car?

Held:At the time of accident, the company intended

To retain the car until Abd Karim paid in full the
Initial payment of RM1,000 and execute a hp
Agreement with a finance company. But Karim
Has not paid up yet so company (Nanyang on
Behalf of Lau Teck Siew) still under duty to pay
For the damages.

ii)UTMOST GOOD FAITH: Doctrine developed

thru marine insurance. Generally, parties not
required to disclosed to each other all they
know about the proposed contract.
Insurance contract: failure to disclose can lead
To rescission of contract