Define the Term "Insurable Interest" and State the Effect on the Insured

question 31

Essay

Define the term "insurable interest" and state the effect on the insured where they do not have an insurable interest.

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Definitions:

FMV

Fair Market Value is an estimate of the market value of a property or asset, based on what a knowledgeable, willing, and unpressured buyer would likely pay to a knowledgeable, willing, and unpressured seller.

§179 Expense

A section of the U.S. tax code that allows a business to deduct the full purchase price of qualifying equipment or software within the tax year.

Business Assets

Economic resources or items of value owned by a company that are expected to provide future benefits or profits.

Bulldozer

A heavy, tractor-like vehicle with a large, metal plate used to push large quantities of soil, sand, rubble, or other such material during construction or conversion work.