Insurable interest as a requirement for insurance contracts : a comparative analysis

Abstract

This mini-dissertation has as its focus the application of the doctrine of an insurable interest in South Africa. The research question to be answered was to what extent, if any, an insurable interest should be considered to constitute a requirement for the validity of an insurance contract. The overall approach was to analyse and discuss the case law and academic literature with regard to the definition and application of the doctrine. Due to the fact that the difficulties experienced with regard to the doctrine are not unique to South Africa, a comparative approach was adopted. The comparative approach entailed a detailed discussion regarding the definition and application of the doctrine in Great Britain and Australia. The research will show that the doctrine has dubious historical origins and that the importation of the doctrine is questionable at best. Furthermore, the doctrine tends to be anti-consumer in that it provides an obscure technical defence whereby the insurer is able to avoid performing in terms of the contract of insurance. Due to the afore-mentioned reasons it is recommended that the doctrine be scrapped in favour of the indemnity principle that already satisfies the objectives sought to be achieved by the doctrine.