Which of the following does not constitute an insurable interest?

a. a savings and loan company holding a mortgage on your home.

b. you make an offer to buy your neighbor's house.

c. your lease makes you liable for fire damage to your rented premises.

d. you have custody of a valuable painting when the owner is away.

Answer:you make an offer to buy your neighbor's house.

Explanation:

As seen from the aforementioned alternatives which all have insurable interest. Thus they are expantiated;

1) Firstly, a savings and loan company holding a mortgage on your home has an insurable interest on interest of the property on insurance premium.

2) Secondly, your lease makes you liable for fire damage to your rented premises makes for an insurable interest which is in form of mortagee/morgator contract, even if it isn't your property, it makes you liable for an insurable interest.

3) Thirdly, you have custody of a valuable painting when the owner is away also makes you eligible for an insurable interest. Though here as carrier, it still gives the right to an insurable interest courtesy of the fact that it is in your custody.

Finally, you make an offer to buy your neighbor's house doesn't make you eligible for an insurable interest because it's just a matter of a vocal agreement, thus no transaction has been carried out and therefore, no property transferred to your custody either way.

B) you make an offer to buy your neighbor's house.

Explanation:

An insurable interest is something (a material or immaterial object) that an individual believes he should obtain insurance to protect himself from unforeseen events such as economic losses, death, etc.

For example, you can obtain insurance for your house or your car (material objects), a bank can obtain insurance for your mortgage (immaterial object), etc.

When you make an offer to buy something, there is nothing (no object) you can insure since you don't own anything yet.