Theft of Property Sold Online

January 21, 2010

The insured sold a diamond engagement ring on eBay. The buyer paid with a fraudulent Paypal account, and insured is now without the ring or the money. Is this considered theft under the HO 03 policy or is this considered a voluntary parting of the ring through the sale of the ring?

Illinois Subscriber

The policy does not define “theft,” so standard practice is to refer to a desk reference. Merriam Webster Online

defines “theft” as “the act of stealing, specifically the felonious taking and removing of personal property with intent to deprive the rightful owner of it; b: an unlawful taking (as by embezzlement or burglary) of property.”

 

In your situation, the buyer used a fraudulent Paypal account to induce the insured to part with the ring. The intent was to deprive the rightful owner of the ring, and the thief did so successfully. Therefore, this is a theft. There is no exclusion for voluntary parting on the homeowner's policy.