Last week’s post by Chase Mathis about California Insurable Interest made me think, "we’ve written about Insurable interest issues in California before." So, I did something that I suggest others do when researching topics on the Merlin property insurance law blog—use the search function on the right side of the blog to find relevant posts.
When I wrote "California Insurable Interest" into the key word search, seven posts were noted:
- Insurable Interests Defined: A Blog Series – Episode Four, California
- Insurable Interests – Making Sure You Really Have an Insurance Policy
- Insurable Interest – Making Sure You Really Have an Insurance Policy
- The Road to ALE, from Loss to Being Incurred, Part 1
- Make Sure Your Policy Insures Your Interests!
- Property Owners Are Not the Only Ones With an Insurable Interest
- Marijuana in the Mainstream: How courts are dealing with insurance claims of loss for marijuana plants and marijuana plant clean-up
Disputes involving Insurable interest usually involve the following situations:
- A death occurs and the policy is not changed.
- A divorce or separation occurs and the policy is not changed.
- A named insured business operating at the property is not the owner of the property, although affiliated with the operating business.
- The tenant and not the owner of the property is the only party listed as a named insured.
- Family trusts and limited liability entities are owners of the property but not named insureds.
- A family member occupying the premises, but not owning the premises, is the only named insured.
- A real estate transaction occurs and the parties do not get permission to transfer the insurance contract or the new policy is not written with the correct buying entity.
Insurance agents and brokers should always be asking and warning about the significance of these issues with their clients and especially at the time of placement of the insurance. Many policyholders are ignorant about the fine detail of insurable interest requirements and are more concerned with "getting the property" rather than "getting the right party" insured.