A potential client came into my office today because his new vehicle was stolen and the insurance company denied coverage. The vehicle was a brand new car, and he owed $40,000 on it.
The client told me that he had left the key fob either in the vehicle or close to the vehicle. The thief was able to get away with the vehicle without any marks of forcible entry. The vehicle was later found, wrecked and totaled in a ditch.
The insurance company denied coverage because there was no evidence of forcible entry. They argued that the policy only covered theft that was “due to forcible entry.”
The client was understandably upset.
I researched the case of Offutt v. Liberty Mutual:
The case of Offutt v. Liberty Mutual Insurance Co. *(Court of Appeals of Maryland) involved a dispute over whether an insurance policy covered the theft of tools from a truck. The policy in question stated that it would not cover theft unless it was “due to forcible entry (of which forcible entry there must be visible signs at point of entry).”
The truck in this case was parked with all of its doors and windows locked. The next morning, the tools were found to be missing, but there were no visible signs of forced entry. The insured argued that the position of the keyhole in the door, which was in the unlocked position, was sufficient evidence of forcible entry. However, the court disagreed, finding that the policy required “visible marks” of forced entry.
The court’s decision in this case is significant because it provides guidance on how to interpret insurance policies that require visible signs of forced entry. The court’s ruling makes it clear that the policy language must be strictly interpreted, and that mere circumstantial evidence of forced entry is not sufficient.
Here are some of the key takeaways from the case:
- Insurance policies must be strictly interpreted.
- Mere circumstantial evidence of forced entry is not sufficient to trigger coverage under a policy that requires visible signs of forced entry.
- The position of a keyhole in an unlocked door is not sufficient evidence of forcible entry.
*My research into Washington Case law found that Washington Courts will generally uphold insurance company exclusions for losses caused by burglary without forcible entry.
This is just one example of how insurance companies can deny coverage for theft. It is important to read your policy carefully and understand the terms and conditions. If you have any questions, be sure to ask your insurance agent.