70A-2a-218 - Insurance and proceeds.
70A-2a-218. Insurance and proceeds.
(1) A lessee obtains an insurable interest when existing goods are identified to the leasecontract even though the goods identified are nonconforming and the lessee has an option to rejectthem.
(2) If a lessee has an insurable interest only by reason of the lessor's identification of thegoods, the lessor, until default or insolvency or notification to the lessee that identification is final,may substitute other goods for those identified.
(3) Notwithstanding a lessee's insurable interest under Subsections (1) and (2), the lessorretains an insurable interest until an option to buy has been exercised by the lessee and risk of losshas passed to the lessee.
(4) Nothing in this section impairs any insurable interest recognized under any otherstatute or rule of law.
(5) The parties by agreement may determine that one or more parties have an obligationto obtain and pay for insurance covering the goods and by agreement may determine thebeneficiary of the proceeds of the insurance.
Enacted by Chapter 197, 1990 General Session