Insurance and wagering contracts are not one and the same. They both are different. When the concept of insurance came into being, it was decided that the insurance is same as the wagering contract. However, it was later viewed as a separate contract. Finally, it was clearly said both the contracts, insurance and the wagering, are not the same and they are different.
The insurance contract is an indemnity contract. The insurance contract in here is not the insurance contract of life, accident and any sickness. Here the contract of insurance seeks to compensate the loss faced by the insured on happening of an event which is uncertain. In case of life insurance, the amount payable on happening of death of the insured is agreed and decided in advance.
Covering the loss occurred due to happening of an uncertain event of the insured is the main aim behind the contract of insurance.
Insurable interest or pecuniary interest of the insured on the subject-matter is important in the contract of insurance.
Utmost good faith is a fundamental element of insurance and this is most important in the insurance contract.
It is legally enforceable. The aim behind this contract is pooling of risk and hence this is encouraged legally.
Scientific calculations are performed to arrive at the premium amount.
The contract of indemnity can never be seen in a wagering contract. There is no scope of covering any risk by the parties.
The aim of the contract of wagering is always to gain through speculation.
There is no pecuniary interest from the parties.
Good faith is never observed in here neither need to be observed.
This is void ab initio (from the beginning). It is against the public policy as it deals with the speculative gains.