replacement policy on stolen items

Submitted by Anonymous (not verified) on Fri, 04/27/2007 - 15:49

I received a check from my insurance Co for items that were stolen from me in a burglary. I have a "replacement value" policy. The check was for the depreciated amount of the items. To receive the additional amount for "full replacement cost" I have to purchase the items that were stolen and then the insurance co will issue a new check to cover the difference between replacement cost and depreciated cost. As some of the items I do not care to replace, would it be legal to purchase the item, send the receipt to the insurance co for reimbursement, and then return the item? Thanks for any ideas on this. Kenlassen

Posted: 27 Apr 2007 11:19 Post Subject:

I'm not a lawyer and I'm betting this is a grey area. Also, I think your looking a little to hard at the subject.

First and foremost... the legality of the issue is a civil matter (your carrier would need to bring a civil suit against you). It's almost 100% sure your carrier would never do this... even if they found out. So the legality of it is really probably a moot point.

If they brought suit, could they win? I'm guessing there is a possibility as your policy states that the replacement cost is only owed when you actually incur the expense for the replacement items. If you bought the items and returned them, you should be required to pay your carrier back the funds. If it could be shown that you bought the items with the _intention_ of returning them, then the replacement cost should not be owed from the start. If your carrier _really_ went out on a limb, if they could prove that you bought them with the intent to return them later but obtaining the replacement cost pay, you could be held guilty of fraud (you attempted to defraud the carrier).

If I was a betting person, I'd put everything I own on no one ever finding out and even if they did, at worse, they'd non-renew your policy.

I guess is sort of like the tree breaking in the forest, if no one hears it, does it make a sound, theory.

Morally, the decision is yours. I consider myself a semi-moral person and as long as it was only an item or two, I see little harm in it.

Posted: 28 Apr 2007 10:24 Post Subject: coverage

My insurance policy is in mine and my husbands name. My son has been added to the policy.Can he buy a vehicle in his name and still be covered?

Posted: 28 Apr 2007 02:11 Post Subject:

Paula, you should really have started a new thread for this question.

Short answer is yes, it's done all the time. Long answer is a little more complex. In order to own a vehicle, your son would need to be at least 18 years old. If he's listed on your policy then he's considered an "insured", listed as a driver, but the policy is not his. So you and your husband are really insuring a vehicle you don't own... which, technically, should not be done as you don't have a "insurable interest" in the vehicle. That is, your insuring property that, if lost or damaged, you don't suffer that loss. Another example... I can't insure my neighbors car as I've not suffered a loss if it's lost or damaged. That would be really just gambling. But your situation is really different for several reasons. It's clear that your offering some support to your son. So you do have somewhat of an "interest" in the car. Also, your son is listed on the policy and he's the principle driver of the vehicle. So the insurance company is charging the exact premium for the risk. So even if you technically don't have an "interest" in the car, the insurance company is still getting paid for the exact risk involved.

Again, this type of thing is done _all_ the time.

On a side note, the hard part comes when an adjuster needs to make a total loss settlement on that vehicle. Technically they have to pay the policy holder, not the driver. But in this case the vehicle owner is not the policy holder. So if they pay the policy holder, they are paying them for a loss they've really not suffered. It's just an odd situation. But the adjuster almost always either pays the policy holder(s) only or (better yet) places the policy holder(s) and the owner on the check. It's really not too big of a deal.

TMI? :lol:

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