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Question: Can you insure a stolen car (and then claim for it being stolen from you!)

Mr. A.P. bought a car through a "friend of a friend." He signed a document with the details of the sale and received the papers and transfer of ownership.

The car was stolen and then the true facts came to light. The original car had been totaled but criminal elements "borrowed" the number and transplanted it onto a "new" second-hand car. This "new" car had obviously been stolen previously and given a new identity.

Mr. A.P. in all innocence claims that seeing he had paid his premium, he was entitled to the insurance benefits.

The case went to court and the judge made two points:

  1. If a person buys a car from a car-dealer and it turns out to be stolen, he is entitled to the insurance benefits, obviously providing that he is unaware of the car’s history (Section 34 of the Israeli Sales Law, 1968).
  2. However, if the sale is through a private person it becomes the buyer’s responsibility to check that he is not in fact a party to dealing in stolen property. If nevertheless, the person is unwittingly tricked, he/she is not guilty of a crime, but at the same time he/she has no "rights of possession."

To sum up: The aim of all insurance in the case of a claim is to restore the insured to the situation he/she was before the insurance event took place.

In the case of stolen property, the insured does not have an object that has real value. He is by law not entitled to possess such an object and therefore unable to insure it.

The judge ordered Mr. A.P. to pay all court costs and for the insurance company to refund all premiums.

In Gemara terminology, a classic "Mekach Ta’ut"