For a claim to be payable on property covered by a California homeowners policy, at what point must the insured's insurable interest in that property exist?

Explanation

Insurance Code §286 provides that an interest in property insured 'must exist when the insurance takes effect, and when the loss occurs, but need not exist in the meantime.' Both ends are required and a gap in between does not defeat the policy, but the requirement that decides whether a claim is PAYABLE is the one at the time of loss: a homeowner who sold the property the day before the fire has no interest at the moment of loss and cannot collect. (b) is wrong because interest at inception alone is not enough; (c) is wrong because interest running through the term but absent at the loss is exactly what §286 refuses; and (d) is wrong because §286 requires an insurable interest in property insurance. Contrast life insurance, which the same section treats the opposite way — the interest must exist when the insurance takes effect but need not exist when the loss occurs.