If homeowner’s insurance is in one name but the mortgage loan is under another name, is theproperty still covered?

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If homeowner’s insurance is in one name but the mortgage loan is under another name, is theproperty still covered?

Yy name is on the insurance and the mortgage loan is under my boyfriend’s name. We both are living together. We had a small fire at our home and I called the insurance company but when we got the house I didn’t know that the insurance had to be in the name of the person that is on the home loan (which is my boyfriend). So now the insurance company is saying we might not have a claim. What can I do?

Asked on August 11, 2010 under Insurance Law, California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

There is a term in the insurance business that all insurance companies hang their hat on: "insurable interest."  The meaning of the term differs depending on the type of insurance (property insurance, life insurance, etc.).  But is basically means that if something were to happen to the thing or person insured, you would suffer a financial loss.  For property and casualty insurance you must have an insurable interest at the time that you purchased the insurance and at the time that the loss occurs. You have an insurable interest in any property that you own or which is in your possession.  Forget the loan.  Who holds the deed to the home?  I think that you should seek help here from an attorney in your area.  At the very least the insurance company should return the premiums paid (which may cover the loss and the purchase of insurance correctly if it is deemed to be incorrect here).  But state law will govern.  Good luck.


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