Luggage Lost or Stolen?

This issue comes up a lot and there is always a difference of opinions.

Our Insured flew on a commercial flight and although they arrived at their destination, their luggage did not. The airline has not been able to locate the luggage and has since paid our Insured their limit. The insured is now coming to us for the remainder of the loss. Does the peril of “theft, including attempted theft and loss of property from a known place when it is likely that the property has been stolen” cover this type of loss?

Is there any case law, decisions, etc?

Rhode Island Subscriber

Manopla v. Travelers Ins. Co., 139 Misc.2d 30, 525 N.Y.S.2d 997 (N.Y.City Civ.Ct.,1988), supports the position of the luggage being stolen since the situation is virtually identical; the insured's luggage was missing upon arrival at the airport of final destination. The case states, “Declaration from airline that after thorough search it was found that in all probability insured's missing luggage was stolen or misappropriated was sufficient proof to permit reasonable inference to be drawn that in all probability insured's luggage was stolen and, therefore, was covered by homeowner's policy.” Key to this is the statement from the airline stating that in all likelihood the property was stolen; Couch on Insurance 151:100 asserts that under a theft policy, the insured must produce sufficient direct or circumstantial evidence that it is probable, more likely than not, that the property was stolen or wrongfully taken. Simply showing that the property disappeared is not sufficient to establish a theft.