Do I have insurable interest in Indiana?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: May 8, 2011

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Insurance Question from Brownstown, IN

Asked on 05/08/2011

Do I have insurable interest in Indiana? We have a signed purchase agreement, and was scheduled to close April 19, 2011. Bank required paid homeowners insurance policy before closing. Tree fell on house after effective date of policy and before closing.(still have not closed yet) The house is a HUD home and has no insurance on it other than maybe mine.

Answer given on May 11, 2011

While you have an interest in the property, there is no legal, insurable interest in the property.  If title had been transferred, you would have an interest in the property.  However, since title, or closing had not happened, you have no legal interest in the property.

I would think that HUD would have some insurance on the property, even if it is a “blanket” policy on the property, or if it is self insured.  I would not want to think the US Government does not insure the properties they own, or control without some sort of insurance.  Please seek advice from your HUD contact or mortgage broker to discuss this.

You should also discuss this with you insurance agent.  The insurance company ay decide there is an insurable interest since you were waiting for the closing and had full intent to own the property


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