Which statement about insurable interest is FALSE?

The statement regarding insurable interest that is false is that neighbors can have an insurable interest in property. Insurable interest is a fundamental principle in insurance that establishes the relationship between the insured and the subject of insurance. For an individual or entity to take out an insurance policy on a property, they must have a legitimate interest in that property, typically implying that they would suffer a financial loss should the property be damaged or lost.

In the case of neighbors, while they may care about the well-being of a neighboring property and may even be affected by its condition (for example, if it were to become dilapidated or a source of danger), they do not inherently possess an insurable interest in that property. An insurable interest is legally recognized in contexts where a direct financial stake exists, such as ownership, leasing, or certain contractual situations. Therefore, neighbors do not have a claim to insure someone else's property since they do not incur a loss from harm to that property.

On the other hand, the other statements are true: a renter does not typically have an insurable interest in the property itself (as the legal responsibility lies with the landlord), insurance is designed to protect one's financial stake in an asset (ensuring that individuals can recover from losses