Insurable interest requirement precludes recovery for the full value of destroyed property.

The plaintiff/insured owned property as a tenant in common with a business partner. The plaintiff procured a fire insurance policy with Allstate solely in his name. In October 2009, when the policy was in effect, the premises were destroyed by fire. Allstate paid one-half of the value of the property because the plaintiff had only a one-half insurable interest. The plaintiff asserted that a tenant-in-common has an undivided right to the full use, enjoyment and possession of the property and was entitled to recovery of the full property value. Allstate's motion for summary judgment was granted, and the case was dismissed. The case was affirmed on appeal where the court cited Insurance Law § 3401, which limits a contract or policy of insurance to the insured's "insurable interest."

Case Law Alert - 3rd Qtr 2012