Exploring the necessity of insurable interest in South African insurance contracts : a critical inquiry

Abstract

This paper considers the principle of insurable interest in South African law. It considers whether it aids in providing clarity to the parties of an insurance contract or whether it contributes to confusion for the parties. This paper further considers whether insurable interest should be a standalone requirement or whether it forms part of the risk requirement of an insurance contract. South African law has not definitely decided on the role that insurable interest plays in the insurance contract. This paper considers how the doctrine has evolved in South Africa via the courts and determines that the doctrine should be absorbed into the understanding of risk and requires that the legislation step in to provide clarity. Keywords: Insurable interest; transfer of risk; insurance regulations; elements of an insurance contract; requirements of risk in insurance.