What requirement must be met for an insurance policy to be valid in Florida?

For an insurance policy to be valid in Florida, it is essential that it include an insurable interest. This principle ensures that the policyholder has a legitimate stake in the insured entity or property, meaning they would suffer a financial loss if the insured event occurs. Insurable interest serves to prevent moral hazards and gambling on insurance, ensuring that policies are used for legitimate risk management rather than for speculative purposes.

This requirement is foundational in the context of insurance law, as it upholds the principle that a policyholder must have something to lose to seek coverage. Without insurable interest, the validity of the contract can be challenged, and claims may be denied if the insurer believes that the policy was issued without this important criterion.

While there are other factors at play in ensuring an insurance policy is compliant with state regulations—such as language or state approvals—having an insurable interest is the core requirement directly tied to the essence of insurance contracts in Florida.