An applicant wants to buy a fire policy on a beachfront cottage. The policy will be valid only if the applicant has insurable interest. Insurable interest in property must exist:
a.Only at the time of application
b.Only at the inception of the policy and not at loss
c.Only when the policy is delivered
d.At the time of loss
Explanation
Section 250 (and §280) provide that insurable interest in property must exist at the time of loss. Unlike life insurance, where insurable interest is required only at inception, property insurance follows an indemnity principle and requires the insured to actually stand to suffer economic loss when the event occurs.
Law Reference: Cal. Ins. Code §250This topic, taught in full in the California Property & Casualty Broker-Agent guide. California Property & Casualty Broker-Agent Study Guide — 2026 Edition — PDF + EPUB, $24.99 · 14-day refund →
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