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Murphy v. State Farm Fire & Cas. Co.

2012 IL App (1st) 112143 (Ill. App., 2012)

Words & Phrases

Insurable Interest

Trial Judge

Ronald F. Bartkowicz

Appellate Judge

Justice Hoffman


Owners maintain insurable interest in building after demolition contract is signed.

Fact Summary

The owners of a four-unit residential building decided to demolish the building and rebuild.  In September, they entered into a demolition contract and paid a small deposit.  Six months later the building caught fire and was damaged.  State Farm refused to pay the claim asserting that a building scheduled to be demolished lacked value.  The trial court granted summary judgment in State Farm's favor holding that because the owners had signed a demolition contract, no insurance interest remained.  The appellate court reversed, finding that insurable interest should be determined at the moemnt of loss and not by speculating about future, uncertain events.