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Distinction Between Contracts Of Insurancde And Wagering Agreement

The contract of insurance differs from the wagering agreement in the following respects:


Basis of distinction

Contracts of insurance

Wagering agreement

1. Insurable interest

Person having an insurable interest can insure his life or property.

Parties to a wagering agreement need not have insurable interest.

2. Actual amount payable

In case of contracts of insurance except life insurance, the actual amount payable need not necessarily be the full amount for which the property is insured.

In case of wagering agreements, the actual amount payable is usually fixed.

3. Beneficial/against the public policy.

These are regarded as beneficial to the public policy.

These are considered to be against public policy.

4. Gamble

Such agreements do not tantamount to gambling as they involve the element of investment and protection.

Being change oriented, these are closer to gambling

5. Contract of indemnity

General insurance is a contract of indemnity while life insurance is not.

Wagering agreements are not contract of indemnity.


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