Property insurance policies require that an insured have a financial interest in the insured property. Courts have defined a “financial interest” as either: “(1) a monetary right, title, or legal share in the property; (2) a monetary advantage, profit, and responsibility, i.e. a monetary stake or claim in the property; or (3) a monetary share of the ownership or control in the property.”1 A financial interest might include a leasehold interest pursuant to a written lease if the lease contains an obligation to procure insurance or repair the property.
Continue Reading Can An Insured With An Invalid Lease Have A Financial Interest In A Property?

The standard commercial lease for an entire building will require the tenant to either buy building insurance or reimburse the landlord’s premium payments if the landlord buys the insurance. If the tenant opts to purchase the building insurance, this often results in a lower overall premium to the tenant since the building coverage is underwritten with the tenant’s other insurance needs, such as business interruption insurance, workers compensation, liability insurance, and business personal property coverage. This begs a legal question—can a tenant can have an insurable interest in property it leases, i.e., the landlord’s building?
Continue Reading Does a Tenant Have an Insurable Interest in a Leased Building? Yes

Recently, my fiancé and I watched the Season 3 premier of Divorce on HBO. It’s sort of a guilty pleasure. I admit, at first, I was hesitant when my fiancé recommended I watch. But, one episode in and I was hooked. It’s funny, witty, snarky, and overall relatable for many people. If you haven’t watched this show yet, I recommend it. Albeit, HBO has now announced this is the final season of the show so try and not get too attached.
Continue Reading Life Mimics Art or Is It the Other Way Around? Insurable Interest and Risk of Loss Are Always Part of Insurance Coverage

Chip Merlin and John Garaffa
Chip Merlin and John Garaffa

It is amusing and almost stunning to find others who used to be young attorney “rookies” in this field of property insurance law become masters. John Garaffa of Butler Weihmuller Katz Craig, is now a master in this field of law. He captured the room of property insurance law lawyers with what would normally be an impossible boring discussion regarding insurable interest. He provided specific examples explaining concepts and issues of insurable interest only gained through experience and a long time of thoughtful study. If my mentor, Paul Butler, could hear him, I am certain he would be proud.
Continue Reading John Garaffa on Insurable Interest

In this episode we’re headed to Rhode Island, the Ocean State, to define insurable interests.

Rhode Island case law on the issue dates back to the 1800’s. In Cronin v. Vermont Life Insurance Company, the Supreme Court of Rhode Island held that to recover on an insurance policy one needed an insurable interest.1 Rhode Island also follows the principle that we’ve seen many other states follow, a “person has an insurable interest in property, by the existence of which he will gain an advantage, or by the destruction of which he will suffer a loss, whether he has or has not any title in … the property itself.”2

Continue Reading Insurable Interests Defined: A Blog Series – Episode Seven, Rhode Island

As I write this post, I’m on a flight to Las Vegas, Nevada, for a Merlin Law Group seminar. I’ve been to Nevada before on several occasions, but this will be the first time to Las Vegas! It seems only fitting that in this episode we’re traveling to Nevada, the Silver State, to define insurable interest.

Continue Reading Insurable Interests Defined: A Blog Series – Episode Six, Nevada

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.

Continue Reading Insurable Interests Defined: A Blog Series – Episode Three, Arizona