An “insurable interest” exists when the insured derives a pecuniary benefit or advantage by the preservation and continued existence of the property or would sustain a pecuniary loss from its destruction, according to the 1993, Dallas Court of Appeals opinion, Jones v. Texas Pacific Indemnity Co.
In the 1986, Tyler Court of Appeals opinion, Thompson v. Trinity Universal Insurance Co., the sole owner of a corporation that was a holding company for business interests who suffered a pecuniary loss from the destruction of a building owned by the corporation has an insurable interest in the building.
In the 1985, San Antonio Court of Appeals opinion, St. Paul Fire & Marine Insurance Co. v. Daughtry, the owner of a house offered the house to a house mover, as long as he could remove it by December 31, 1982. The owner also gave the insured a letter permitting him to move it after January 1, 1983, if the mover failed to exercise his option. Before the mover’s option expired, the insured applied for a “builder’s risk” policy on the house, and the insured’s agent issued a binder on the policy. A fire destroyed the house on December 21, 1982. The court held that the insured did not have an insurable interest in the property, as he suffered no pecuniary loss as a result of the destruction of the property.
To have an insurable interest in the property, it is not necessary that the party own the property. This was made clear in the 1993, Dallas Court of Appeals opinion styled, Jones v. Texas Pacific Indemnity Co.
Different persons may have an insurable interest in the property at the same time, for example:
mortgagor and mortgagee
life tenant and remainderman
vendor and purchaser
lessor and lessee
A mortgagee has an insurable interest in mortgaged property separate from the mortgagor’s to the extent of debt secured, regardless of any other security that he or she may hold.