Insurable interest exists when an insured person derives a financial or other kind of benefit from the continuous existence, without repairment or damage, of the insured object (or in the case of a person, their continued survival). A person has an insurable interest in something when loss of or damage to that thing would cause the person to suffer a financial or other kind of loss. Normally, insurable interest is established by ownership, possession, or direct relationship. For example, people have insurable interests in their own homes and vehicles, but not in their neighbors' homes and vehicles, and almost certainly not those of strangers. The "factual expectancy test" and "legal interest test" are the two major concepts of insurable interest. Historical background The concept of insurable interest as a prerequisite for the purchase of insurance distanced the insurance business from gambling, thereby enhancing the industry's reputation and leading to greater acceptance of the insurance industry. The United Kingdom was a leader in that trend by passing legislation that prohibited insurance contracts if no insurable interest could be proven. Notably the Marine Insurance Act 1745 (which introduced the concept of an insurable interest, although it did not use the term expressly), the Life Assurance Act 1774 which renders such life insurance contracts illegal, and the Marine Insurance Act 1906, s.4 which renders such contracts void. In 1806 Lord Eldon LC sitting in English House of Lords in Lucena v Craufurd (1806) 2 Bos & PNR 269 sought to define an insurable interest, and although that definition is often used, modern commentators regard it as unsatisfactory. Lord Eldon defined it as "a right in property, or a right derivable out of some contract about the property, which in either case may be lost upon some contingency affecting the possession or enjoyment of the party". Life insurance Insurable interest refers to the right of property to be insured. It may also mean the interest of a beneficiary of a life insurance policy to prove need for the proceeds, called the "insurable interest doctrine". Insurable interest is no longer strictly an element of life insurance contracts under modern law. Exceptions include viatication agreements and charitable donations. The principle of insurable interest on life insurance is that a person or organization can obtain an insurance policy on the life of another person if the person or organization obtaining the insurance values the life of the