Insurable Interest Definition and Cases
Definition of an insurable interest is found in Davis v. Phoenix Ins. Co. (1896) 111 Cal. 409 43 P. 1115: "It is held sufficient that the insured has a direct pecuniary interest in the preservation of the property, and that he will suffer a pecuniary loss as an immediate and proximate result of its destruction." (Id. at p. 414).
see also Royal Insurance Company v. Sisters of Presentation (9th Cir. 1970) 430 F.2d 759, 761; California Food Service Corp. v. Great American Ins. Co. (1982) 130 Cal. App. 3d 892, 897 182 Cal. Rptr. 67).
Reflecting these familiar principles of insurance law, the definition of "covered property" in the insurance policy itself included "property of others for which you are legally liable, providing an entry for such coverage and limit of insurance are shown in section 4 of the declarations of this coverage part".