KRS 355.2A-218: Insurance and proceeds.

(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'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's insurable interest under subsections ( 1) and (2), 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 (1) 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.