                                 CODE OF VIRGINIA

INSURANCE AND PROCEEDS (§ 8.2A-218)

1. A lessee obtains an insurable interest when existing goods are identified to
the lease contract even though the goods identified are nonconforming and the
lessee has an option to reject them.

2. If a lessee has an insurable interest only by reason of the lessor&#8217;s
identification of the goods, 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&#8217;s insurable interest under subsections (1) and
(2) of this section, the lessor retains an insurable interest until an option to
buy has been exercised by the lessee and risk of loss has passed to the lessee.

4. Nothing in this section impairs any insurable interest recognized under any
other statute or rule of law.

5. The parties by agreement may determine that one or more parties have an
obligation to obtain and pay for insurance covering the goods and by agreement
may determine the beneficiary of the proceeds of the insurance.

HISTORY: 1991, c. 536.