New York Independent General Adjuster Practice Exam 2025 – Complete Preparation Guide

The concept of insurable interest is fundamental in insurance, as it establishes a legitimate stake in the property or life being insured. This requirement helps prevent moral hazard, where one might benefit from the loss of the insured item.

Ownership of property constitutes a clear insurable interest because the owner stands to suffer a financial loss if that property is damaged or destroyed. Employment relationships can also be associated with insurable interests, especially in life insurance, where the life of an employee can be insured to protect the interests of the employer or business.

Family ties create an insurable interest as well, particularly in life insurance. Family members generally have the right to insure each other's lives due to the emotional and financial risks involved in the loss of a loved one.

When analyzing the choices presented, it's evident that none of them adequately fits the description of lacking insurable interest. Given that ownership, employment relationships, and family ties all represent legitimate forms of insurable interest, the assertion that "none of the above" constitutes a lack of insurable interest is accurate.