# Research article: insurable interest, insurance and gambling

URL: https://insurancelawestonia.ee/blog/2018-07-01-research-insurable-interest-and-gambling/
Author: Dr Olavi-Jüri Luik, Partner, Head of Insurance Law, attorney at law (Advokaadibüroo WIDEN OÜ)

> Luik and Saar, Juridica 2018/7: what legally separates insurance from gambling and how insurable interest is implemented in Estonian law.

> **Article (in Estonian):** O.-J. Luik, K. Saar, "Kindlustushuvi kui kindlustuse ja hasartmängu eristamise alus" (Insurable interest as the basis for distinguishing insurance from gambling), Juridica 2018/7, pp. 447–456. [Article page on Juridica](https://www.juridica.ee/article.php?uri=2018_7_kindlustushuvi_kui_kindlustuse_ja_hasartm_ngu_eristamise_alus) (published 2018)

Co-author: Kärt Saar.

## Research question

Insurance and gambling both rest on statistical probability and the pooling of many participants' contributions. What separates them legally?

## Main arguments

Insurance and gambling share common roots, so the distinction is not self-evident. The difference lies in expectation: the policyholder hopes not to be the one whose risk materialises, while the gambler hopes to be the single winner among many. In the authors' view the line is a product of legal and cultural development rather than an absolute truth. The central principle that separates insurance from gambling is insurable interest, and the article examines whether and how it has been implemented in Estonian law.

## Relevance for insurers

Law of Obligations Act (võlaõigusseadus, VÕS) § 478 defines insurable interest as the policyholder's interest in insuring against a specific risk and mainly regulates the consequences of its absence or termination: where no interest exists when cover begins, the policyholder is released from paying the premium. The VÕS does not expressly make insurable interest a condition of validity. This matters, for example, when insuring property owned by another or after a sale of the insured property.

## Related pages

- [Insurable interest and sums insured](https://insurancelawestonia.ee/estonian-insurance-contract-law/insurable-interest-and-sums-insured)
- [The modern model of indemnity insurance (2020)](https://insurancelawestonia.ee/blog/2020-07-01-research-modern-indemnity-insurance-model)