Q

Our insured is covered by a garagekeepers policy. He was conducting a state inspection on a car, performing an emissions test for which the engine had to be running. At this point an unknown person jumped into the vehicle and stole it. The insurance company is denying liability because the adjuster does not feel that our insured is legally liable. The adjuster stated “what could the insured have done to prevent the theft?”

What is your opinion of this coverage question?

Pennsylvania Subscriber

A

Garagekeepers legal liability coverage is based on the insured's being legally liable for loss to a covered auto. The adjuster is wrong to assume that the insured is not legally liable in this case. Whether there is legal liability is a question of law that should be settled in a court, so unless the adjuster is an attorney familiar with the law in Pennsylvania , he should not be making legal interpretations. A case for legal liability can be based on a bailment situation. The loss of the car was direct and accidental. If the insured had comprehensive coverage or specified causes of loss coverage under his garagekeepers form, there is no exclusion that would apply. The garagekeepers form was written to cover such a loss as happened here.

As for the coverage question, what the insured could have done to prevent the theft is not the point. The insured had the car in his care at the time of loss.