Very few realtors, RE Investors, Sellers et al … understand what the term “insurable interest” means. It simply means that like, the Home Owner (of course) has an insurable interest in a property. That is, if it burns down they want the check from the property insurance company to pay to rebuild. Easy. But what if the property has become vacant (for whatever reason) and now is held by a “title holder”, i.e, bank, mortgage note holder. They now have an insurable interest. This means they can place a claim on the property and get some (not all) of repairs paid for by the insurance company.

Just remember that ‘insurable interest’ is a requirement at the purchase and issue of a policy, not at the time of a claim.

Hope this helps.


The owner of the legal estate has an insurable interest, and the mortgagor, on account of his equity, has also an insurable interest.

An insurable interest means that the policy holder must stand to suffer a direct financial loss if the event does occur. A tenant may not necessarily have a direct insurable interest in the rented property but the landlord may.