Insurable Interest in Contract to Purchase Home

Recently, one of our insureds signed a contract to purchase a home. We issued an insurance binder, because we felt that our insured had an insurable interest in that property. Prior to closing on the loan—but while the sellers were still living in the home—our insured hired an inspector to survey the home for any possible problems with the wiring, water, roof, etc.

A day or so after the inspection, the seller noticed water in the carpet around the bar. The water originated from the sink behind the bar. The water damage was about $900.

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