Question

When must an insurable interest exist for a property insurance claim?

A) at the policy inception and time of loss
B) at the policy inception only
C) at the time of loss
D) Either at the policy inception or at the time of the loss

Answer 1

An insurable interest must exist for a property insurance claim at D) either the policy inception or C) the time of the loss, meaning the policyholder must have a financial interest in the property. It's important to have an insurable interest when purchasing a policy to be eligible for a claim.

Step-by-step explanation:

An insurable interest must exist for a property insurance claim either at the policy inception or at the time of the loss. This means that the policyholder must have a financial interest in the insured property at the time of purchasing the policy or when the loss occurs. For example, if you own a house, you have an insurable interest in it because you would suffer a financial loss if it gets damaged or destroyed. However, if you sell the house, your insurable interest would cease to exist, and you wouldn't be able to make a property insurance claim for any damage. Therefore, when taking out a property insurance policy, it's important to ensure that you have an insurable interest at the time of policy inception or at the time of the loss to be eligible for a claim.