Rental Car Under my Name Stolen by Acquaintance

[Allyson581]

I only found out today that I may I may have a claim on my personal commercial auto policy. I would like to have opinions from professionals with auto insurance experience.

We purchased a used car and insured it with Geico for both comp and liability. It was being repaired so while it was being fixed, I rented a car, under my name with Fox. An acquaintance took keys from my hand and was playing with the them while standing around the car. It was a social gathering and I was distracted, went to the bathroom, etc. It was only upon leaving that I realized that "Tony" (not his real name) had driven off in the car. I wasn't too concerned at first, but got his number from someone and called. He answered and said he said "yeah, I'm on my way back." He never answered my calls again.

Long story as short as I can make it, I spent three weeks being told byFox that they would not report it stolen it was my responsibility and they were happily billing my credit card. I called local police in my town and Oakland Police and both refused to assist and refused to take a stolen vehicle report because it was a "civil case". I had another key and spent nights running to this guys Father's, Sister's and girlfriend's house in the in the Oakland "hoods" to repo my car back. I'm not a brother, so I looked somewhat suspicious. Never found it.

Eventually, it was dropped off at one of the Rentals locations. During this time I felt under seize without options. I am lucky that the final bill from Fox was only $3,500. It could have been so much worse. I have since paid this amount and thought lesson learned the hard way.

Then I read a similar situation but the guy hired an attorney and a claim was made on his personal insurance. The attorney said simply, "this car was stolen from you and it a theft is covered for loss"

Is this a legit thought process? What about statutes of limitations on filing a claim? I know it's seems a long shot but can't blame a guy from trying.

Any thoughts appreciated.

rental car was stolen and stolen by someone i knew. i reported it to the police and they stated it was a civil case. i reported it ti Fox Rental and they said i was responsibl

 

[djs]

Your comp coverage will cover for a stolen car (minus your deductible). Since it was a rental, then it would extend coverage to the rental car.

Unfortunately, you effectively gave him permission to use the car (this is how the police look at it) since he had custody of the keys and you didn't immediately stop that. The police aren't going to argue the point about whether that implied permission to drive the car or not, its not worth it to them (or the taxpayers).

It would take a lot to convince your insurance to pay out on this claim since he took the keys from your hand with your knowledge. They will definitely deny the claim up front. Convincing them to change that will be tough and very expensive and still unlikely. Remember, they have tons of lawyers as well.

Dan

 

[InsCommentary]

Initially, this could be viewed as a permissive use, but at some point there was a conversion when he wouldn't bring it back. At that point, a theft occurred. There is a lot of case law on this. You'd have to review your policy to know if there is coverage. The bottom line is that, because you kept paying the rental fee, the rental car company never suffered a loss of rental income.

 

[Allyson581]

Your comp coverage will cover for a stolen car (minus your deductible). Since it was a rental, then it would extend coverage to the rental car.

Unfortunately, you effectively gave him permission to use the car (this is how the police look at it) since he had custody of the keys and you didn't immediately stop that. The police aren't going to argue the point about whether that implied permission to drive the car or not, its not worth it to them (or the taxpayers).

It would take a lot to convince your insurance to pay out on this claim since he took the keys from your hand with your knowledge. They will definitely deny the claim up front. Convincing them to change that will be tough and very expensive and still unlikely. Remember, they have tons of lawyers as well.

Dan

Thank so much f or your thoughtful response. Initially this is why I just accepted the responsibility although I never gave him keys nor was it in my thoughts that he could drive the car (niavete)). I would have refused had he asked. It was stolen from me. If he took the keys and left with my regular car, would that be theft? Yes, I believe the police would have taken a report. Again, your theory feels right but unfair ( I know that sounds childish). I have a free consultation with an attorney and I have to face there may be no recovering my lose or if I wish to have my auto insurance relationship altered.

Again great reply and my sincere thanks!

 

[djs]

A conversation with an attorney is the right thing to do. Just make sure that you will get something out of it if the attorney pursues it. Odds are, he will write a couple of letters for you to try to get it through claims, which might works since its a low enough $$$ amount. If push comes to shove though, it is doubtful it will go any further since legally there is not a technical theft.

Not returning a car is not considered theft. Okay, technically yes, but if you gave them any sort of implied permission, it doesn't get prosecuted and police won't get involved. This doesn't mean you didn't suffer a loss though.

I would rather see you just file a small claims case against the guy who took the car and didn't return it. This would be a simple win and would make you whole again without involving a bunch of other parties.

Dan

 

[insurancevet]

The thief is likely broke and so you won't get your money back taking him to court because he has no money to pay you even if you win. If he had anything he would not have resorted to stealing your car. You need to let people know they need to have nothing to do with you at all if they even associate with that person or anyone he knows. Call a detective up and offer to take them to lunch so you can discuss options. He may be a drug user so reporting that would enable the police to investigate and search his home for illegal drugs and that could generate a reward of some sort. Discuss that as a possibility with the detective.

 

[InsCommentary]

More on this issue for what it's worth:


Counterfeit Checks and Theft
Author: Bill Wilson

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?



In September 2002, we wrote an article called "What is 'Theft'? It Doesn't Matter!" about an insured who was given a $29,000 counterfeit cashier's check for a ring. The claim was denied as "voluntary parting" and not theft (even though "theft" includes voluntary parting and despite the fact that the ring was scheduled and it doesn't matter whether it's "theft" or not). Without going into the details here, I encourage you to read that article before continuing since this claim is similar.

Here is the complete claim scenario as reported by the consumer looking for help:

Christmas of 2002, my 2001 Corvette convertible was stolen by a scam artist that gave us a counterfeit check for $41,500. The bank didn't find out that the check was counterfeit until a week later. We still had the car covered on our insurance and now they've said that they won't pay for our loss. We have never made a claim on our insurance in the 10 years we have used them and as soon as one claim, very important to us, comes up then they screw us. They are saying since we signed the title to the Corvette over to the criminal, it gives up any rights to keeping coverage on that vehicle. I need to know if there are any similar cases and if there are any law firms that specialize in this kind of case.

Presuming an "ISO-equivalent" policy, coverage is provided for "theft." This term is undefined in the policy. In it's broadest interpretation, "theft" is any act of illegally taking the property of others. The insured never sold his car. No legal sale or transfer of ownership ever occurred. Since the insured never effectively sold the car, he still has an insurable interest and, since the car is declared on his policy and covered for theft, he has a valid claim. Is the adjuster saying that if the car is recovered, the insured no longer has any right to it because he "signed the title" over to the crook? This is the type of question plaintiff's lawyers love to pose to sympathetic juries in bad faith suits.

I think what has the insurer confused is that this is akin to voluntary parting which is typically excluded in commercial property policies. However, there is no PAP exclusion for voluntary parting, trickery, scheme, etc. It's simply a theft. What's interesting is that, when this claim was posed to several agents and adjusters, a couple of them sided with the insurer. Responses included:

Unfortunately, the situation you describe is not considered theft. You parted with the property. (This doesn't mean that what the other party did was illegal... because it is... it isn't theft... it's called "conversion".) Such losses are not normally covered by insurance.

To quote the John McLaughlin of the McLaughlin Group, "Wrong!" The statement that "Such losses are not normally covered by insurance" is immaterial. The question is, what does this specific contract cover? I'd have to disagree with the above for three reasons:

1. Conversion IS a form of theft. In the broadest sense, theft is ANY act of illegally taking the property of others (sometimes referred to statutorily as larceny, though "theft" is generally considered to be even a broader term).

Even from a statutory standpoint, most states have criminal penalties that vary by the type of theft...theft by taking, theft by deception, theft by conversion, theft by shoplifting, etc. For example, criminal penalties for conversion in Georgia are governed by OCGA 16-8-4 and this section is titled "Theft by conversion."

Conversion is where someone lawfully possesses property for a specified use, then converts it to his or her own use in violation of an express or implied agreement. Conversion is simply one form of, or one technique of, theft.

In the claim cited above, there isn't even a conversion. At no point does the thief ever have legal possession of the vehicle. At the time the counterfeit check exchanged hands, a theft was committed.

2. Some policies specifically exclude conversion, voluntary parting, etc. -- but not the standard PAP. It is common in commercial lines for special causes of loss forms to cover theft, but have specific exclusions for certain kinds of theft such as conversion, voluntary parting, scheme, trick, etc. No such exclusion is in the PAP.

3. It doesn't even matter if it was theft. This is a comprehensive claim where coverage is provided on an "all risks" basis. Certain perils such as theft, flood, vandalism, etc. are specifically defined to be "other than collision" losses. However, this coverage applies to any claim that is not "collision" nor otherwise excluded. Since accepting a bad check (aka "theft") isn't excluded, it's covered.

One of our faculty members ran this claim by a Florida trial lawyer he knows who agrees that there is coverage and provides the following analysis:

STATE FARM INS. CO. v. VALENTINE, 29 Ohio App.2d 174 (1971)

According to the court:

"Where the term, `theft,' is used but not defined in an insurance contract drafted by the insurer, it includes any wrongful deprivation of the property of another without claim or color of right."

The court then elaborates, saying:

"Although the term, `theft,' is often used in a popular sense to mean larceny, the terms are not synonymous. Theft is a broader term than larceny and includes other forms of wrongful deprivation of the property of another."

Specifically, the court overruled its previous decision in Royal Ins. Co. v. Jack (1925), 113 Ohio St. 153.

The act of MacQueen (Hyde) in securing the Impala by the use of a forged, counterfeited check, could well qualify as larceny by trick under our Ohio statute, but the Supreme Court says that it is also a "theft," as to insurance coverage, if an insurer fails to carefully define the term in the provisions contained in its policy. A "theft," as it seems in the instant case, would make MacQueen (Mott) a thief. It is clearly a "theft" as to the coverage afforded Mrs. Ziesemer.

Another case, not directly on point but by analogy is applicable:

When a car was rented from Hertz by the use of a stolen credit card, the Florida Supreme Court in Hertz Corp. v. Jackson, 617 So.2d 1051 (Fla. 1993), found a theft had occurred. The case is not exactly on point but I would think there would be coverage. Clearly there was a theft of the car and procurement of the title through false pretenses. A scam is a scam by any other name.

The supreme court also stated, "We emphasize, however, that procurement of a vehicle through fraud is but one factor to be considered in determining whether a vehicle has been the subject of theft or conversion." The supreme court reviewed the undisputed facts — including the facts that Hertz attempted to recover the vehicle and reported it stolen — and the court concluded, "Given these facts, we find that the vehicle was converted and that a theft had occurred."

Finally, in the 1985 case of Mann v. State Farm Mut. Auto. Ins. Co., 1985 OK 27 698 P.2d 925, the Oklahoma Supreme Court ruled that the undefined term "theft" in an auto policy covered the acceptance of a bad personal check in return for the sale of a vehicle. In reaching their decision, the court cited the following cases:

E.G. Almadova v. State Farm Mutual Automobile Ins. Co., 133 Ariz. 81, 649 P.2d 284 (1982)

Massachusetts Fire & Marine Ins. Co. v. Cagle, 214 Ark. 189, 214 S.W.2d 909 (1948)

Farm Bureau Mutual Ins. Co. v. Carr, 215 Kan. 591, 528 P.2d 134 (1974)

Edwards v. State Farm Mutual Automobile Ins. Co., 296 N.W.2d 804, 806 (Iowa 1980)

Milburn v. Federated Mutual Implement and Hardware Ins. Co., 349 P.2d 644 (Okla. 1960)

Pacific Indemnity Co. v. Kohlhase, 9 Ariz. App. 595, 598, 455 P.2d 277, 280 (1969)

Farm Bureau Mutual Insurance Co. v. Carr, 215 Kan. 591, 594, 528 P.2d 134, 138 (1974)

Modern Sounds & Systems v. Federated Mutual Insurance Co., 200 Neb. 46, 50, 262 N.W.2d 183, 187 (1978)

Rudolph v. Home Indemnity Co., 138 N.J. Super. 125, 136, 350 A.2d 285, 292 (1975)

Munchick v. Fidelity & Casualty Co. of New York, 2 Ohio St.2d 303, 305-06, 209 N.E.2d 167, 170 (1965).



Update: Our interpretation is further confirmed by Byrd v. USAA, Georgia Court of Appeals (2012)

 

[djs]

So, did the insurance company ever pay the claim for the bad check loss? Doesn't matter what lawyers say, its what the insurance company and courts say.

By training, if you ask 2 lawyers a question, you'll get 6 answers.