What needs to have an insurable interest for an underwriter to issue an insurance policy?

For an underwriter to issue an insurance policy, the policyholder must have an insurable interest in the subject of the insurance. This means that the policyholder would suffer a financial loss or hardship if the insured event occurs, such as damage to property or loss of life. Insurable interest is essential to prevent moral hazard and ensure that insurance serves its purpose of risk management rather than speculation. Generally, insurable interest must exist at the time the policy is purchased and, in some cases, at the time of the claim.