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WAEC Commerce 1998 Question 24

Question 24

Insurance

If Mr. Olu insures Mr. Obi's house, the insurer may, in the event of a loss, refuse to pay compensation based on the principle of

  1. A.utmost good faith
  2. B.subrogation
  3. C.insurable interest
  4. D.indemnity
  5. E.contribution
Show the answer and explanation

Answer: C (insurable interest)

Explanation

Olu does not own the house and loses nothing if it burns, so he has no insurable interest.