What term refers to any interest in property, whether real or personal, such that the contemplated loss might indemnify the insured?

The term that accurately describes any interest in property, whether real or personal, where a loss can result in indemnifying the insured is known as insurable interest. This concept is essential in the field of insurance, as it establishes a legitimate reason for purchasing a policy. Insurable interest ensures that the insured stands to lose financially if the insured property suffers damage or loss, thus creating a valid basis for the risk being insured.

For example, a homeowner has an insurable interest in their house because they would incur a financial loss if it were damaged or destroyed. Similarly, a person has an insurable interest in their personal belongings or in property they own or have a financial stake in. This principle protects the integrity of insurance contracts and prevents moral hazard, where individuals might otherwise be incentivized to cause damage or loss to claim insurance benefits.

Understanding insurable interest is critical for both agents and policyholders, as it is a foundational element that dictates the lawful ability to obtain insurance coverage.