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Possibly. If you're saying the niece used your credit card, and they want to collect from you, and you are receiving an insurance payment... if they get a court judgment against your property, then you will have to pay. You can, of course, sue your niece to recover anything you had to pay because of her actions.

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Q: When debt was illegally incurred by a niece is credit card company entitled to insurance payment since house burnt down?
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