Definition of "Insurable interest"
Expectation of a monetary loss that can be covered by insurance. Insurable interest varies according to the type of policy. These relationships give rise to insurable interest:
- owner of the property;
- vendor (to the extent of the unpaid balance due on the property sold to the vendee);
- bailee (to the extent of the value of the property under his or her temporary care, custody, and control);
- life estates;
- fee simple estates;
- mortgagee (to the extent of the unpaid balance due on the loan to which the property is pledged as security);