What is an 'insurable interest' requirement in property insurance, and when must it exist?

In property insurance, insurable interest means the policyholder must have a genuine financial stake in the insured property — they would suffer a financial loss if it were damaged or destroyed. Unlike life insurance (where insurable interest is needed at policy inception), in property insurance the insurable interest must exist at the time of the loss, because that is when indemnification is measured. Examples of insurable interest include ownership, a mortgage lender's interest, or a tenant's interest in improvements. This requirement prevents wagering on property one has no stake in. Understanding when insurable interest must exist (at the time of loss for property) is commonly tested.