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Jim Flynt
Registered User
Username: Jimflynt

Post Number: 298
Registered: 6-2001
Posted on Tuesday, May 14, 2002 - 7:32 am:   

Steve, with all due respects, I don't think you have the right answer yet.

You might want to take another look at the definitions within the Coverage C - Personal Property, Special Limits of Liability for some clues as to why.

I am also still looking for someone to make the argument why this should be considered two loss events rather than one.
Steve Florig
Registered User
Username: Sflorig

Post Number: 4
Registered: 3-2001
Posted on Sunday, May 12, 2002 - 11:00 pm:   

The first thing that needs to be looked at is whether or not this is a theft loss. It appears to be theft by deception and as the insured has reported the incident to the police I will allow for coverage under the peril of theft.
That being said we need to decide what items are covered and for how much.

The insured's lost a total of $500.00 in cash. The policy limit for cash is $250.00 (HO3 10/93)

The insured's lost a total of $1000.00 in travellers checks which I am going to classify as cash and subject to the above limit already exceeded. All likelyhood is the insured can recover the money from American Express since that is what travellers checks are for anyway.

The insured's lost $200.00 in stamps which will be covered in full as the policy limit for stamps is $1000.00

The insured's lost $500.00 from their credit card through theft by deception and this amount is equal to the policy limit. This amount will be paid assuming the credit card company has processed payment to Fly by Night.

I would not allow for the $300.00 lost via the checks because the insured has already reached the limit above through the credit card loss which falls under the same limit.

The watch is subject to the jewelry limit of $1000.00 (assuming the watch is not scheduled)

The total net claim is therefore $1900.00 with the $100.00 deductible being absorbed as the deductible is taken from the total loss which is $5500.00.

The insured's can ask for the claims to be handled seperately but that's not going to happen because they have one policy together and this is one event.

I reccommend payment to the insured in the amount of $1900.00

I hope Tina & Tom have many happy years together and maybe next time Tom will schedule that watch!
Jim Flynt
Registered User
Username: Jimflynt

Post Number: 294
Registered: 6-2001
Posted on Sunday, May 12, 2002 - 7:50 pm:   

Tina Toots and Tom Terrific have decided to get married and also have bought a home together to live in after the wedding. The Declaration Page shows each and both of them listed as a 'Named Insured' and the policy is an HO-3 with a $100.00 deductible. Coverage A limits are $150,000.00 and Coverage C limits are $75,000.00.

About two weeks before their wedding day, Tina spots an ad in a local newspaper for a week long all-inclusive Virgin Islands Super Duper Honeymoon Special package through the new travel agency in town, Fly By Night Travel. She drags Tom down there that afternoon to learn more details and hopefully to buy tickets.

Satisfied that the price is right and this is a super deal, they learn the price is $1,500.00 per person and tell Frances Fast, the travel agent, they want to buy now.

Being on a tight budget, they each give Frances $250.00 in cash and Frances gives them a receipt.

Tina and Tom also won $1,000.00 in American Express Travel Checks in a local contest for June Brides, and they apply $500.00 of this to each of their tickets.

Tina and Tom were also given $100.00 in US Postage stamps by friends to use to mail wedding invitations, and Frances tells them she will take the stamps at face value and apply against the travel package costs, and doing so, she gives them a receipt for $100.00 each to be applied to each ticket.

Tina and Tom each pay another $250.00 on their individual MasterCards and then each write checks on their individual checking accounts for $150.00.

Tom explains to Frances that he expects to receive a $500.00 wedding present from his favorite wealthy uncle and asks if there is any way he can pay the remaining total balance of $500.00 after the wedding. Frances spots his $3,000.00 Rolex watch and advises if he will leave it as security/collateral until he comes back to pay the additional $500.00 she will consider the sale paid and mail the airline tickets and hotel and package vouchers within the next few days. Satisfied with their purchase, they leave the Rolex watch, and excited head out to their favorite restaurant to celebrate with drinks.

Being busy with wedding details, they do not realize until the week of their wedding, that the tickets and vouchers have not arrived in the mail. When they try to call Frances at Fly By Night, they learn the telephone number has been disconnected, and with further investigation, learn that Fly By Night has closed and left town taking with them the Rolex watch and their cash and stamps. They also learn their checks to Fly By Night have cleared the bank and their individual credit card charges have been debited.

They report the loss to the local Police department who advise them that Frances and Fly By Night seem to have disappeared off the face of the earth, and cannot be found, as their identity was all faked.

Through the courtesy of sympathetic friends, they spend their 'honeymoon' at a friend's cabin on a nearby lake, all the time regretting have done business with Frances, and broken hearted that their dream of a Virgin Island honeymoon did not materialize.

The friend who loaned them the cabin, advised them to file a claim with their insurance company, and you are assigned this claim.

At first skeptical, you pull out and review your trusty HO-3 policy and realize there just might be coverage for this loss.

How would you handle this claim? What coverage recommendation would you make to the carrier for this loss?

By the way, being somewhat insurance savvy, Tina and Tom, advise you that each of them has suffered a separate loss and want the claim adjusted accordingly.

(Message edited by jimflynt on May 12, 2002)

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