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In 1972, Betty DeWitt and her husband, Joseph, purchased a house. Title was taken in Betty’s name. Seven years later, the DeWitts were divorced. Under the 1979 divorce decree, Joseph was given possession of the house and Betty was ordered to sign the deed over to him. Joseph died in January 1980. Soon thereafter, Betty moved into the house and purchased a fire insurance policy from American Family Mutual Insurance Company. The policy had a face value of $38,500. In August 1980, the house was completely destroyed by fire. At that time, American Family learned of her divorce and the decree ordering her to convey title to Joseph. American Family refused to pay on the policy, arguing that Betty did not have an insurable interest. Was American Family correct?

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