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Counterfeit Checks and Theft

A Corvette was stolen by a scam artist that gave the insured a counterfeit check for $41,500. The bank didn't find out that the check was counterfeit until a week later. The PAP was still in force, but the adjuster denied the claim. She said that, since the insured signed the title to the Corvette over to the criminal, he no longer owns it and has no insurable interest. Is the insured just out $41,500?

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