Asked by Nathan Tsung on Jun 11, 2024
Verified
West is seeking to collect on a property insurance policy covering certain described property which was destroyed.The insurer has denied recovery based upon West's alleged lack of an insurable interest in the property.In which of the situations described below will the insurance company prevail?
A) West is not the owner of the insured property but a long-term lessee.
B) The insured property belongs to someone else,but West holds the mortgage on it.
C) The insured property does not belong to West,but instead to a corporation which he controls.
D) The property has been willed to West's father for life,and upon his father's death,to West as the remainderman.
Insurable Interest
The stake or financial interest that an individual or entity has in the subject matter of an insurance policy, which must exist at the time of loss for the insurance claim to be valid.
Property Insurance Policy
An agreement that offers monetary compensation to the owner or lessee of a building and its belongings in the event of destruction or theft.
Lessee
A person or entity who leases or rents property from a lessor.
- Discern the prerequisites and conditions vital for an insurable interest in property and life assurance policies.
Verified Answer
KC
Kimberly CrymesJun 14, 2024
Final Answer :
C
Explanation :
Since the property belongs to the corporation,West cannot claim to be directly affected by the value of the property.It would be difficult for him to prove his own economic stake in the property.
Learning Objectives
- Discern the prerequisites and conditions vital for an insurable interest in property and life assurance policies.