False Pretense Exclusion and Theft Coverage

June 11, 2012

We would really like your opinion regarding a discussion we have been having with regard to our garage insurance and the exclusionary language for false pretense in the CA 00 05 coverage form. Our claims specialist makes a good point for theft coverage applying in the two scenarios listed. Do you think losses of these sorts are actually covered as thefts because an insured does not actually “voluntarily” part with a car?

Here are the scenarios, with the thief acting as a potential customer in both examples. The thief takes a car on a test drive with the insured's salesman going along for the ride. The thief then forces the salesman out of the car and drives off. Another scenario is when the thief asks to hear what the car sounds like and is given the keys to start the car. He then drives the car from the lot and disappears.

These scenarios do not seem to be voluntary parting with a car and the false pretense exclusion requires the insured to voluntarily part with the car by trick or scheme.

Arizona Subscriber

These scenarios are theft losses. The key point is the voluntary parting.  Forcing a salesman out of the car and driving off is certainly not a voluntary parting. And, giving the keys to someone so he can start the car up in the lot is not voluntary parting either if the person then drives off the lot. It may be a voluntary parting of the keys but it is not a voluntary parting of the car since the insured had no intention of letting this happen and no actual belief that the thief would drive off the lot in the car. These are theft claims.

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