Which party may also have an insurable interest in a property besides the owner?

An insurable interest in a property exists when an individual or entity suffers a financial loss if the property is damaged or destroyed. The party that has an insurable interest is typically someone who can benefit from the property's existence or be adversely affected by its loss.

The bank or mortgage holder has a significant insurable interest in a property because they have provided financing for the purchase of that property. Their financial investment is dependent on the property's value being maintained; thus, if damage occurs, the bank would incur a loss since their collateral is jeopardized. This relationship necessitates that the mortgage holder is protected through insurance, which secures their financial interest in the property.

In contrast, a next-door neighbor may have no financial stake in the property, and a local municipality's interest is more about property taxes and maintenance rather than a direct financial investment in its value. Similarly, a local political representative does not possess an insurable interest since they are not financially impacted by the property's condition. Therefore, the bank or mortgage holder is the entity that clearly maintains an insurable interest equivalent to that of the property owner.