Tom takes out a mortgage with First National Bank to buy a house. Tom obtains a fire

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Tom takes out a mortgage with First National Bank to buy a house. Tom obtains a fire insurance policy, partially payable to the bank. After Tom makes the last mortgage payment, the house is destroyed by fire.

Regarding payment for the loss, the bank

a. can collect because its insurable interest existed when the policy was obtained.

b. can collect because its mortgage required Tom to take out the policy.

c. cannot collect because its insurable interest did not exist when a loss occurred.

d. cannot collect because its mortgage required Tom to take out the policy.

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Business Law Text And Exercises

ISBN: 9780357717417

10th Edition

Authors: Roger LeRoy Miller, William E. Hollowell

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Question Posted: Feb 26, 2024 08:55 AM

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Tom takes out a mortgage with First National Bank to buy a house. Tom obtains a fire

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The correct answer is a can collect because its insurable i...View the full answer

Business Law Text And Exercises

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