Distinguish between a “contract of insurance” and a “wagering contract”
Distinction between a contract of insurance and a wagering contract
- A wagering contract is not legally enforceable (void) but an insurance contract is.
- A contract of insurance indemnifies against loss or the payment of a specified sum upon the happening of a certain event while wagering is the staking of something of value upon the ascertainment of the truth concerning a past or future event where each party must stand either to win or lose.
- The stake is the only interest of the parties in the wagering contract while the assured must have an insurable’ interest in the subject matter of a contract of insurance.
- In wagering contracts, the premiums cannot be recovered while in insurance contracts, the premiums are recoverable.