In property insurance, when must insurable interest exist?

In property insurance, insurable interest must exist at the time of the loss. This means that the insured must have a personal stake in the property in question; if the property is damaged or destroyed, the insured would suffer a financial loss. Having insurable interest at the time of the loss ensures that insurance is being used to protect real economic interests, which is a fundamental principle of insurance.

This requirement helps prevent moral hazard, where someone might purposely damage property they do not own or have financial responsibility for, knowing they could profit from the insurance payout. Therefore, it is crucial that the insured proves they have something to lose at the moment a loss occurs to validate their claim and uphold the integrity of the insurance system.