Theft of Own Property by Insured

Q

We have an unusual situation. Our insureds were both named insureds on a homeowners policy (HO-3). They were not married. He claimed that when they broke up he told her she could have anything she wanted, but that a verbal agreement was reached for division of property. He came home one day to find everything in the home gone.

He is making a claim for a theft loss. He was told by the police that if he pursues this they can arrest the person in possession of the property, but he is afraid of retaliation. He prefers to pursue the matter in civil court.

What should we do? Do we deny based on the exclusion for intentional loss?

Hawaii Subscriber

A

We do not think there is a theft claim to deny. Since both persons involved were named insureds, in theory each had the right to remove property whenever and wherever he or she chose. A named insured cannot make claim against himself.

Webster's New Collegiate Dictionary defines “theft” as the “felonious taking and removing of personal property with the intent to deprive the rightful owner of it.” But who is the rightful owner?

Ultimately, it appears that this is a matter to be determined in court.

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