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Under Massachusetts indemnity principles applied to property insurance under M.G.L. c. 175, when must the insured's insurable interest exist for the policy to be enforceable at the loss?

Q: Under Massachusetts indemnity principles applied to property insurance under M.G.L. c. 175, when must the insured's insurable interest exist for the policy to be enforceable at the loss?

At the time of loss — Massachusetts follows the majority rule: a property insurance contract is enforceable only if the insured has an insurable interest when the loss occurs. The rule prevents wagering contracts and ties indemnity to a real economic relationship to the covered property at the moment damage takes place.

AOnly at the time the application is signed

BOnly at policy renewal

At the time of loss

DBoth at issuance and at every premium payment

Why this is the answer

Massachusetts follows the majority rule: a property insurance contract is enforceable only if the insured has an insurable interest when the loss occurs. The rule prevents wagering contracts and ties indemnity to a real economic relationship to the covered property at the moment damage takes place.

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