Papago State Park

A few weeks ago I traveled to Scottsdale, Arizona for a deposition. After the deposition concluded, I had a little bit of time before my flight home, so I stopped by Papago State Park in Phoenix to take in some of Arizona’s beauty and to take a few photographs (including the one above). This week in my series on insurable interests, we travel to the Copper State (aka the Grand Canyon State) to take a look at how insurable interests are defined.

Arizona has a statute which defines and lays out what an insurable interest is and who or what holds an interest concerning property insurance:

§ 20-1105. Insurable interest with respect to property insurance

A. No insurance contract on property or of any interest therein or arising therefrom shall be enforceable as to the insurance except for the benefit of persons having an insurable interest in the things insured.

B. “Insurable interest” as used in this section means any actual, lawful and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction or pecuniary damage or impairment.

C. The measure of an insurable interest in property is the extent to which the insured might be damaged by loss, injury or impairment thereof.1

The language of this statute is very clear and is very similar to the language we have seen in the case law in other states. Case law in Arizona also follows the statute. In Butler v. Farmers Insurance Company of Arizona, the Supreme Court of Arizona held that the bona fide purchaser of a stolen car had an insurable interest in that property.2 In a much older case, North River Insurance Company v. Sanguinetti, the court held that, where a building was on leased land and fixtures were bought on conditional sales contract, the insured had insurable interest.3

Tune in next time to see where we go from here. As always, I’ll leave you with a (mildly) related tune, The Eagles with, Take it Easy:

1 A.R.S. § 20-1105.
2 Butler v. Farmers Ins. Co. of Arizona, 126 Ariz. 371 (1980).
3 North River Ins. Co. v. Sanguinetti, 38 Ariz 221 (1931).