Legal Question in Real Estate Law in California

Re: 2nd lien insurable interest

I agree with the general premise that you must have an insurable interest at the time of loss in order to be entitled to proceeds of insurance.

However, I'm puzzled as to why the facts given present a problem. My first reaction is that you are confusing the date of loss with the date of settlement of the claim, and maybe the date of claim gets thrown in to the mix as well.

Also, analysis is clouded since we aren't told what kind of insurance or what kind of loss. Was it a lender's title policy? hazard insurance? Is the claim for waste by the borrower?

Re: 2nd lien insurable interest

You question can't be answered as written. It is confusing.

What kind of insurance claim? What kind of damages?

Usually, if a claim accrues, the date is important and a foreclosure would have no relevance.

I have no idea what type of an insurable interest we are dealing with.

However, in general, if there is any way an insurer can avoid paying a claim, they will do so.