Because you are not the person who had the insurance, the insurance company is not required to pay you, unless you sue your brother-in-law, and win.
It was a waste of your time to tell them that you owned the property. It does not matter whether it belongs to you, him, or Santa Claus. Insurance companies are not required to pay anyone except (a) the person who has the insurance, or (b) a person who sues the person with the insurance and wins.
If you attempt to sue only the insurance company, and do not sue your brother-in-law, then you will lose, and the insurance company will not pay you.
Since your brother-in-law is the one who borrowed the property and did not return it, you sue him, and only him, and not the insurance company.