General Insurance PrinciplesQuestion 160 of 474
For a homeowner to collect on a property insurance claim, insurable interest must exist:
a.At no particular time
b.At the time of the loss
c.Only when the premium is paid
d.Only when the policy is first issued
Explanation
In property insurance, insurable interest, the financial stake a person has in the property, must exist at the time of the loss. A homeowner who has already sold the house before a fire has no insurable interest and cannot collect. This differs from life insurance, where insurable interest is required only at the policy's inception, not at the time of the claim.
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Related questions on this topic
- The principle of indemnity is BEST expressed by which statement?
- An applicant for a homeowners policy fails to mention that her roof is 28 years old and showing daylight through cracked tiles. The insurer later denies a wind claim and rescinds the policy. The insurer's likely legal theory is:
- Insurance is best described as a method of handling risk by:
- The principle of indemnity means an insured who suffers a covered loss should be:
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- Because an insurance policy is written by the insurer and offered on a take-it-or-leave-it basis, any ambiguity in the wording is generally interpreted:
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