What is true concerning insurable interest in a property insurance policy?

Insurable interest is a fundamental principle in property insurance that ensures the policyholder has a legitimate stake in the insured property. This principle establishes that the insured must stand to suffer a financial loss if the property were to be damaged or destroyed. Therefore, property insurance cannot legally exist without the presence of insurable interest, making it essential for the validity of the policy.

In contrast, waiving insurable interest is not a common practice as it undermines the basic principles of insurance. While there are different types of insurance policies that may or may not require insurable interest, property insurance explicitly mandates it. Furthermore, while insurable interest principles may apply differently in cases involving hired and non-owned autos, this scenario does not negate the necessity of insurable interest in standard property insurance.

Thus, the requirement for insurable interest in property insurance underscores its critical role in the insurance process, where a valid policy hinges on the policyholder's financial relationship to the property in question.