Ted Borrowed $140,000 from ABC Bank to Purchase a Home

Ted borrowed $140,000 from ABC Bank to purchase a home and pledged the home as collateral for the loan.Shortly after purchasing the home,Ted lost his job.He could not find another job and could not pay the monthly mortgage.Ted set fire to the home.The claims adjuster suspected arson,and an investigation proved that Ted intentionally caused the loss.Under the mortgage clause of the Homeowners 3 policy,how will this loss be settled?

A) The insurer has no liability because the loss was intentional.
B) The insurer will pay Ted the actual cash value of the loss as intentional loss is not excluded.
C) The insurer will pay ABC the value of its insurable interest and pay Ted the value of his insurable interest.
D) The insurer will pay ABC the value of its insurable interest and then attempt to recoup the loss payment from Ted.