§ 25-2A-218. Insurance and proceeds. - North Carolina Statutes

§25‑2A‑218.  Insurance and proceeds.

(1)        A lessee obtains aninsurable interest when existing goods are identified to the lease contracteven though the goods identified are nonconforming and the lessee has an optionto reject them.

(2)        If a lessee has aninsurable interest only by reason of the lessor's identification of the goods,the lessor, until default or insolvency or notification to the lessee thatidentification is final, may substitute other goods for those identified.

(3)        Notwithstanding alessee's insurable interest under subsections (1) and (2) of this section, thelessor retains an insurable interest until an option to buy has been exercisedby the lessee and risk of loss has passed to the lessee.

(4)        Nothing in thissection impairs any insurable interest recognized under any other statute orrule of law.

(5)        The parties byagreement may determine that one or more parties have an obligation to obtainand pay for insurance covering the goods and by agreement may determine thebeneficiary of the proceeds of the insurance. (1993, c. 463, s. 1.)