ABSTRACT
A contract of insurance is illegal if the insured lacks an insurable interest in what has been purportedly insured. In the case of property insurance, to have an insurable interest a person must have, first, a "relation in fact" to the subject-matter of the insurance giving rise to an economic interest; and, second, a "legal or equitable relation" to the subject-matter insured. Insurance purporting to cover the liability incurred by the insured in the commission of a crime will not be enforced. Whether or not there can be cover of illegal conduct, in theory there is no public policy against insurance of exemplary damages, as there is in some parts of the USA. Such is the importance of the underlying public policy, the liability element in motor insurance has been enforced even when the conduct of the insured was wilful and criminal. Premium rating by insurers may infringe legislation against discrimination.
