Insurance coverage for the theft of another's property

Coverage Q&A: A borrowed fishing pole was stolen while in the insured's care.

How does insurance coverage apply when property not owned by the insured is stolen while in the insured’s care? (Photo: Shutterstock)

Every claim is different, and some insurance policies can be difficult to interpret for unique situations. FC&S Expert Coverage Interpretation, the recognized authority on insurance coverage interpretation and analysis for the P&C industry, makes it simple to find credible answers to your complicated coverage questions. Analysis brought to you by our FC&S experts. 

Editor’s Note: When an insured has someone else’s property in their custody, and the property is accidentally damaged, it can be unclear where to locate coverage.

Question: Our insured borrowed a friend’s fishing pole. While in the insured’s care, custody or control, the fishing pole was stolen. The value of the fishing pole is less than the insured’s first-party deductible.

Section II of the policy contains additional coverage, “Damage to Property of Others,” that includes the following language:” ‘We’ will pay, at replacement cost, up to $15,000 per ‘occurrence’ for ‘property damage’ to property of others caused by an ‘insured.’” It also states,” ‘We’ will not pay for ‘property damage’”:

  1. To property covered under Section I of this policy;
  2. To real property rented to an “insured”;
  3. To property owned by an “insured,” a tenant of an “insured,” or a resident in “your” household;
  4. To a recreational vehicle such as a snowmobile, golf cart, camper, motor home or similar vehicle, or farm machinery or equipment, rented, leased or borrowed by an “insured”; or
  5. Arising out of: (a) A “business” engaged in by an “insured”; (b) Any act or omission in connection with premises owned, rented or controlled by an “insured,” other than the “insured location”; or (c) The ownership, maintenance, occupancy, operation, use, loading or unloading of “aircraft,” “hovercraft,” watercraft or “motor vehicles.”

Do you believe this Section II Liability Additional Coverage would pay for the stolen fishing pole?

— Ohio Subscriber

Analysis:  Under Section I of the policy, the personal property of others in the insured’s care, custody or control is covered if the insured requests the carrier to provide coverage. However, there also appears to be coverage under Section II given the language above. Is there duplicate coverage, and how is the distinction made in the policy?

Answer: To learn the answer to this week’s coverage Q&A, please log into your FC&S Expert Coverage Interpretation account.

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