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Explaining Personal Indemnity and Insurable Interest   

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First party property insurance is a contract of personal indemnity. The  insurer promises to indemnify the first party, the insured, in the event  the insured incurs a loss as a result of one of the perils insured  against by the wording of the policy. Insurance does not follow title to  the land. The insurer makes a promise to the first party, the insured,  that if there is a loss to property in which the insured has an  interest, to pay indemnity for the loss. The \\u201celementary principle of  insurance law that fire insurance\\u201d is a contract of personal indemnity,  \\u201cnot one from which a profit is to be realized.\\u201d [Cigna Property &  Cas. Ins. Co. v. Verzi, 684 A.2d 486, 112 Md.App. 137 (Md. App. 1995)]     The insurance claims adjuster (the adjuster) must always ascertain that  the owner, or a person with some other insurable interest in the  property, is the person insured and that the person insured has an  interest in the property. Failure to do so could result in the insurer  paying the wrong person or paying a person with no right to the benefits  promised by the policy. Proceeds of a policy upon the interest of an  insured are not subject to the claims of others who have an interest in  the property but are not named as insured or who do not qualify as  insureds by definition.  A first party property policy is considered by courts asked to interpret  the conditions of the policy, a contract of personal indemnity. It is a  contract made with the individual protected. The insurance does not go  with the property as an incident thereto to any person who may buy that  property. If it goes at all, it goes as a matter of contract for the  transfer of the policy. [Estate of Cartwright v. Standard Fire Ins. Co.,  No. M2007-02691-COA-R3-CV, 2008 WL 4367573, *2 (Tenn. Ct.App. Sept. 23,  2008) (noting that "[t]he contract of insurance is also purely a  personal contract between the insured and the insurance company, and  does not attach to or run with the title to the insured\'s property  absent an agreement for the transfer of the policy." Fulton Bellows, LLC  v. Federal Ins. Co., 662 F.Supp.2d 976 (E.D. Tenn., 2009).  It may be said, generally, that any one has an insurable interest in  property who derives a benefit from its existence or would suffer loss  from its destruction. An insurable interest in property is any right,  benefit or advantage arising out of or dependent thereon, or any  liability in respect thereof, or any relation to or concern therein of  such a nature that it might be so affected by the contemplated peril as  to directly damnify the insured.  The term \\u201cinterest,\\u201d as used in the phrase \\u201cinsurable interest,\\u201d is not  limited to property or ownership in the subject matter of the insurance.  An insurable interest in property may arise from some liability which  an insured incurs with relation thereto. Such liability may arise by  force of statute or by contract, or may be fixed by law from the  obligations which insured assumes.  \\xa9 2021 \\u2013 Barry Zalma