Not quite stolen vehicles

If a customer tricks you into voluntarily giving him the keys to a car, he leaves and you never see him again, can you report it stolen to the police?  Can you turn in a stolen vehicle claim with your insurance company?    In both cases, NO.  A crime has obviously been committed.  But that crime is not Grand Theft Auto.  It is embezzlement.   Is there a way to insure against this?  YES.  “Trick and Device/False Pretense” coverage can indemnify you from this type of loss.  Not all insurers off this coverage.  We have an insurer that does.       

If you sell a car in good faith, your title says 45,000 miles and the customer is issued a title that says “True Miles Unknown” or “Mileage Exceeds Mechanical Limits” and your customer sues you, will your insurer defend you in court and pay damages?  What about branded titles?  Your title is clean the customer gets a title branded “Salvage” or “Flood” etc.  If you are sued will your insurer defend you and pay damages?  Maybe.  If you have  Errors and Omissions for Title, Mileage and Truth in Lending coverage the answer is yes.        

If you list it as a “scheduled vehicle” it’s covered and so is your vehicle sitting on top of it.  Does this coverage extend to vehicles I tow “for hire?”  NO.  This coverage excludes tow for hire.  It is only available for dealers transporting there own inventory.

Are cars I take on consignment covered?

Maybe.  They are not covered by “dealers open lot/inventory” coverage.  Consignment is not considered inventory by the insurance companies.  There is coverage available.  GKLL – Garage Keepers Legal Liability covers vehicles in your care, custody and control that you don’t own.  It also covers vehicles that you are driving to establish trade in value and vehicles that you are driving to determine if a customer’s compliant about a sold vehicle is valid.  In addition, dollar for dollar this coverage is less expensive than inventory coverage.

Written by: Dave Hoffman              

Broker/Owner

License CA: 0D87197

           AZ: 906944