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Under NY Insurance Law § 3401, at what point must an insured have an insurable interest in property to recover under a property insurance contract?

Q: Under NY Insurance Law § 3401, at what point must an insured have an insurable interest in property to recover under a property insurance contract?

At the time of the loss — NY § 3401 defines insurable interest in property as any lawful and substantial economic interest in the safety or preservation of the property from loss, destruction, or pecuniary damage. The doctrinal rule — well-settled in NY — is that the insured must have insurable interest at the time of loss to recover. This contrasts with life insurance under § 3205, where the interest must exist at policy inception but need not continue.

AOnly at the inception of the policy

BContinuously from inception through loss, or the policy is void ab initio

COnly when the claim is paid

At the time of the loss

Why this is the answer

NY § 3401 defines insurable interest in property as any lawful and substantial economic interest in the safety or preservation of the property from loss, destruction, or pecuniary damage. The doctrinal rule — well-settled in NY — is that the insured must have insurable interest at the time of loss to recover. This contrasts with life insurance under § 3205, where the interest must exist at policy inception but need not continue.

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