In insurance, who has the right to recover losses?

The insured who actually incurs the loss possesses the right to recover losses in insurance. This principle is fundamental in the insurance industry, as it ensures that those who suffer a financial setback due to a covered event are the ones who can claim compensation. This practice protects the interests of policyholders, allowing them to receive restitution for losses that they have directly experienced.

The concept of indemnity also plays a critical role here, which guarantees that the insured is restored to their original financial position before the loss occurred, without profit from the insurance claim. This variously relates to the contractual relationship in insurance, where only the party that has a direct insurable interest in the property or event can file a claim. Other parties or individuals associated with the property, while they may have an interest, typically do not have the legal standing to claim compensation unless they are the named insured or have explicit authorization.

This understanding reinforces the foundational concept of insurance: to secure protection and provide support to those directly affected by an insurable event.