A Research Report Submitted to Mzumbe University – Mbeya Campus College in Partial Fulfillment of the Requirements for the Award of Bachelor of Laws Degree (LL.B) of Mzumbe University
This study is about “the application of insurable interest principle of insurance policies in Tanzania, and how it affects the rights of an insured”, an attempt to make people aware about the law and practice relating to the application of insurance policies in Tanzania and the rights of an insured. One of the essential ingredients of an Insurance contract is that the insured must have an insurable interest in the subject matter of the contract. Insurance without insurable interest would be a mere wager and as such unenforceable in the eyes of law. The subject matter of the Insurance contract may be a property, or an event that may create a liability but it is not the property or the potential liability which is insured but it is the pecuniary interest of the insured in that property or liability which is insured. The main purpose of this study is to create awareness among the people of Tanzania in relation to their rights when it comes to insurance policies. The concept is the basis of the doctrine of insurable interest and was cleared in the case of Castellain v/s Priston in 1883 as. “What is it that is insured in a fire policy? Not the bricks and materials used in building the house but the interest of the Insured in the subject matter of Insurance.”The subject matter of the contract is the name given to the financial interest, which a person has in the subject matter and it is this interest, which is insured. The work is divided into four chapters. Chapter one is research general introduction; chapter two is based on the law and practice of business insurance. Where the concept of insurance in Tanzania is defined as Insurance is a business enterprise which deal with risk handling in the society with exclusion of risks. The business is impressed with a public use and consequently its regulations, supervisions and control are authorized and required to protect the general public and safe guard the interests of all concerned. Chapter three is findings and analysis where some of the cases have been reproduced under this chapter for the purpose of demonstrating the problems resulting there from. chapter four is the conclusion and recommendation. It is further recommended that an insurer who effects a policy knowingly that the customer has no insurable interest, should be stopped from denying liability. There is also a need for extra legal strategy that will enhance public awareness on the principles of insurance.