A company sells its warehouse in March but leaves the property policy in force, and the building burns in June. The claim fails because insurable interest in property must exist:
Explanation
Property insurance indemnifies a financial stake, so the insured must stand to lose something when the loss happens; the seller who no longer owns the warehouse suffers no loss and collects nothing. Requiring the interest only at issue would let a policy pay someone who has since walked away, which is exactly the wagering that the rule prevents. Life insurance takes the opposite approach, testing the interest at inception.
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