Will Insurance Cover Vehicle Being Sold and Check Bounces?

[BigIVU]

Will you please cite the case law?

Florida Supreme Court, Hertz Corp. v. Jackson, 617 So.2d 1051 (Fla. 1993).

When a car was rented from Hertz by the use of a stolen credit card, the Florida Supreme Court found a theft had occurred. The 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."​

An Ohio Court of Appeals case:​

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."​

And the Oklahome Supreme Court:​

In 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).​

 

[AgentProvocateur]

Florida Supreme Court, Hertz Corp. v. Jackson, 617 So.2d 1051 (Fla. 1993).

When a car was rented from Hertz by the use of a stolen credit card, the Florida Supreme Court found a theft had occurred. The 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."​

An Ohio Court of Appeals case:​

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."​

And the Oklahome Supreme Court:​

In 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).​

Thanks for posting the cases. In my State Farm auto policy, theft by this means is specifically excluded, which is a different situation than the cases to which you refer.

I wouldn't say there is coverage, but given the size of the loss, if it happened to me, I would file the claim, and if it was declined, I would talk to a lawyer.

 

[moonlightandmargaritas]

[FONT="Times New Roman","serif"]I sold my motorhome ($59,000) to a buyer whose checkbounced. I am now unable to locate the buyer or motorhome. [/FONT]

Next time, make sure you get certified funds.

Geez Dan, talk about overstating the obvious....

 

[BigIVU]

Thanks for posting the cases. In my State Farm auto policy, theft by this means is specifically excluded, which is a different situation than the cases to which you refer.

I wouldn't say there is coverage, but given the size of the loss, if it happened to me, I would file the claim, and if it was declined, I would talk to a lawyer.

That's interesting. Could you post the exact language from your State Farm policy?

I used the information I posted to help an agent get a claim denial reversed on a Corvette that was stolen using a counterfeit cashier's check. Policy language that would support a $40K+ claim denial would be significant.

 

[AgentProvocateur]

That's interesting. Could you post the exact language from your State Farm policy?

I used the information I posted to help an agent get a claim denial reversed on a Corvette that was stolen using a counterfeit cashier's check. Policy language that would support a $40K+ claim denial would be significant.

Under the Exclusions section for Physical Damage Coverages:

"5. Loss to your car or a newly acquired car if an insured voluntarily relinquishes possession of that car to a person or organization under an actual or presumed sales agreement;"

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That's great you helped get that claim denial reversed, but maybe policy language has changed to address the case law?

 

[BIG RED IS BACK]

Under the Exclusions section for Physical Damage Coverages:

"5. Loss to your car or a newly acquired car if an insured voluntarily relinquishes possession of that car to a person or organization under an actual or presumed sales agreement;"

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That's great you helped get that claim denial reversed, but maybe policy language has changed to address the case law?

remember, every company will have this clause listed differently

 

[AgentProvocateur]

remember, every company will have this clause listed differently

Yes, or not have it at all. Variation in policy language can create a big difference in coverage. The op with the motor home might be about $59,000 better off with a less restrictive policy than I had.

 

[mahituna]

Someone else told me that. You lend a person your car and they fail to return it, the police don't care. But then I was watching Alaska State Troopers the other day. Woman hired a guy to replace her brakes. He was done at 4pm, but failed to return it. They went looking for him and did a felony stop on him, pulled him out at gunpoint.

must be a good smoke you have

So I guess the moral is, it just depends on if the police will care or not.

if you lend a car to someone and they don't return it the police will be involved, why. you have ownership legally of the car, in the laws eyes it's stolen.
If you sell a car and are defrauded and the party that defrauded you has title that is a crime, may even be bank fraud depending on where any of the transaction happened. they will look for the car and if they find the person they will be arrested on fraud charges.