Ted took out an insurance policy on his home when he purchased it. He continued paying premiums on the home even after he sold the home to Helen and received full payment. Ted knew Helen smoked late at night and thought that she might burn the house down. Sure enough, Helens smoking resulted in a serious fire destroying the home although Helen escaped safely. Which of the following is true regarding Teds entitlement to the insurance proceeds on the policy he purchased?

• Ted is entitled to recover.

• Ted is entitled to recover only if Helen does not also have a policy of insurance on the home.

• Ted is not entitled to recover because insurance proceeds are not available when a fire is caused by smoking in the home.

• Ted is not entitled to recover because he had no insurable interest in the home.