Eagle Sales Company owns a warehouse, subject to a mortgage obtained from First National Bank. Separately, Eagle and First National obtain insurance policies from Good Hands Insurance, Inc., to cover the warehouse. Later, Eagle sells the property to Interstate Distribution Corporation but keeps the insurance policy. First National agrees to act as Interstate's mortgagee, and Interstate obtains an insurance policy from Good Hands to cover the property. A fire totally destroys the warehouse.

Question

Eagle Sales Company owns a warehouse, subject to a mortgage obtained from First National Bank. Separately, Eagle and First National obtain insurance policies from Good Hands Insurance, Inc., to cover the warehouse. Later, Eagle sells the property to Interstate Distribution Corporation but keeps the insurance policy. First National agrees to act as Interstate's mortgagee, and Interstate obtains an insurance policy from Good Hands to cover the property. A fire totally destroys the warehouse.

Who can recover an amount for its loss?

Answer 1

To determine who can recover an amount for the loss of the warehouse, we need to consider the parties involved and their interests in the property and insurance policies.

1. Eagle Sales Company: Eagle sold the warehouse to Interstate Distribution Corporation but retained the insurance policy from Good Hands Insurance, Inc. Eagle is no longer the owner of the property, so it cannot recover for the loss.

2. First National Bank: First National Bank holds the mortgage on the warehouse. Although it is no longer the owner, it agreed to act as Interstate's mortgagee. As the mortgagee, First National Bank has an insurable interest in the property and can potentially recover for the loss.

3. Interstate Distribution Corporation: Interstate is the new owner of the property and obtained an insurance policy from Good Hands Insurance, Inc. to cover the property. Interstate has an insurable interest in the warehouse and can therefore recover for the loss.

Based on the information provided, both First National Bank (as the mortgagee) and Interstate Distribution Corporation (as the owner) can potentially recover an amount for the loss of the warehouse. They would need to file claims with their respective insurance companies, Good Hands Insurance, Inc., to seek compensation for the fire damage. The specific terms and conditions of their insurance policies would determine the amount they can recover. It is recommended that they contact their insurance companies and follow their claims process to initiate the recovery.