Which individual would NOT have a bona fide insurable interest in property?

• A. The title holder
• B. The mortgagee
• C. The contract purchaser
• D. An individual expecting to be a creditor

Answer: (C)

A bona fide insurable interest in property refers to a financial stake or relationship that an individual has with the property, such that they would incur a loss if that property were damaged or destroyed. For someone to have an insurable interest, they must stand to benefit from the property’s existence and suffer from its loss.

The title holder has complete ownership and thus has a strong insurable interest. The mortgagee, typically a bank or financial institution that has lent money for the property, has an insurable interest because they have a vested interest in ensuring the property is not damaged, as it secures the debt. An individual expecting to be a creditor also has an insurable interest, as they can demonstrate a financial stake related to the property through an expected loan or reimbursement scenario.

However, a contract purchaser does not possess a bona fide insurable interest in the same manner as the others. Although they have intentions or agreements regarding the purchase of the property, they do not yet hold the title or have ownership. Therefore, they would not be at financial risk regarding potential losses incurred to the property until the contract is fulfilled, making their insurable interest questionable or non-existent at that point.

Thus, the most appropriate answer identifies the contract purchaser as the individual