A contract of insurance differs from a wagering contract in several key ways: 1. A contract of insurance requires the holder to have an insurable interest, meaning they will suffer damage if the insured event occurs, while a wagering contract does not require any interest in the outcome. 2. In a contract of insurance, both parties have an interest in the subject matter, while in a wagering contract neither party has any interest in whether the event happens or not. 3. Contracts of insurance are intended to indemnify against loss or risk, while wagering contracts simply pay a fixed amount regardless of any loss or damage from the event.