Insurance is for people who would actually lose something. Under California Section 280, a contract of insurance on property in which the insured has no insurable interest is void.
Section 282 lists three forms of insurable interest in property, each tied to something the person already holds:
an inchoate interest founded on an existing interest;
an expectancy coupled with an existing interest in its source.
Section 283: a mere contingent or expectant interest is not insurable unless it is founded on an actual right to the thing or on a valid contract for it. Someone who only hopes to inherit a cabin has no insurable interest; a buyer under a valid purchase contract does, even before title passes.
Assignment: under the California Standard Form Fire Insurance Policy, an assignment of the policy is not valid without the insurer's written consent, because the insurer chose to cover this insured. Selling the property does not move the policy to the buyer. Under Section 305, the mere transfer of the insured property does not transfer the insurance, but suspends it until one person owns both.