What is the general rule regarding who may benefit from an insurance contract?

The principle that only parties directly mentioned in the contract may benefit reflects the nature of insurance agreements, which are typically contracts between the insurer and the insured. In legal terms, this principle is known as "privity of contract," which states that only those who are parties to a contract have the rights to enforce it or benefit from it. In the context of insurance, this means that benefits are limited to the policyholder and any specifically named beneficiaries within the policy.

This rule establishes clear accountability and helps maintain the insurer's ability to assess risk and determine premiums based on the parties involved. It ensures that claims are made by those who have a legitimate interest in the contract, preventing any potential claims by unrelated third parties who might not have contributed to the risk being insured. While there are exceptions and specific circumstances under which third parties might benefit, such as through the assignment of policy rights or specific statutory provisions, the general rule emphasizes the importance of the named parties in insurance contracts.