The Best Policy: Leaving the bag in the car

“I was right there and I never took my eyes off it!”

“Tom, since you are going for lunch, would you mind taking these repair items over to the trade shop? Be careful, there’s nearly $25,000 of our customers’ jewelry in the bag today.”

“Sure, Jerry; no problem. I can leave now.”

So Tom heads out the door with the repair items in the green zipper pouch that the store typically uses for such transports, and since it is on the way to the shop, Tom stops at Billy Bob’s Burgers for one of their famous onion-habañero cheeseburgers. The line at the drive-thru was 4 cars deep and Tom was anxious to get on with his errand, so he decided to park near the entrance and go inside.

Remembering his valuable cargo, Tom put the green bag in the trunk, and then made certain that the car was locked and the alarm set before going inside.

Bunny and Clyde had been watching the store for several days, and they recognized the packed zipper pouch that various members of the staff regularly carried out of the store, and also of its return a short time later. They had determined the obvious, that the pouch contained jewelry, destined for either the Post Office or a jewelry repair shop, they guessed.

They had decided that today they would follow the bag and its courier to see where it was being taken; and thus Tom becomes their target. They see Tom put the pouch in the trunk and walk into Billy-Bob’s. No reason to wait any longer; this would be an easy heist.

Clyde pulls his vehicle into a position to block Tom’s car and Bunny quickly steps out, holding a spring-loaded punch (available in most any hardware store). With it, the driver’s side window shatters into thousands of pieces, and she reaches inside for the trunk release lever.

The car alarm is triggered, but the honking and blinking lights draw little attention from passers by; but Tom recognizes the sound and looks out through the burger shop windows. He rushes out, shouting – just as Clyde and Bunny screech away; the back of his vehicle still agape.

The crime – grand larceny by means of burglary from a vehicle. Let’s examine it from an insurance standpoint.

First question – Will it be possible to know what was stolen and what the values were?

Let’s presume that all of the items being taken to the shop were personal jewelry items belonging to customers of the jewelry store. Were the items logged in as they were accepted from the customers?

Yes, the store maintains a book of customers’ repairs, and notations are made when an item is sent out of the store for any reason. Additionally, when Jerry prepared the bag for transport a two-copy list of the items was made, one of which was in the bag – the other held by the store.

Second – Do we have item descriptions and values?

As a general rule, the person in the store accepting jewelry from a customer always asks that customer for a value, which is then stated on the envelope and log-in book along with a cursory description of the item.

Where customers’ property is concerned, the more information that is available, the easier – and quicker – will be the claims process. As a rule, always ask the customer for an estimate of the value of an item. When no descriptions or values are available, fair settlement with each customer can prove time-consuming and awkward.

Third – Does the store have the right kind of insurance policy?

The store is carrying a Jewelers Block policy, which specifically provides insurance coverage for jewelry – including loose stones as well as finished jewelry, watches, even material for jewelry manufacture and repair. It insures customers’ property under the same limit that applies to a jeweler’s inventory. If the store were to have only a basic business insurance policy, all jewelry-related property would be either excluded or subjected to a minimal limit, such as $1,000 (total loss).

Fourth – Does Jewelers Block insurance cover property that is away from the premises?

In most block policies there is a specific limit for property that is off premises and in the custody of the jeweler or an employee. $25,000 is a common sub limit for this, and it could be higher for specific individuals or for taking packages to and from the post office. Transporting customers’ goods to a repair shop would be included in this coverage.

Fifth and finally – are there any exclusions which might apply to this loss?

There is – Jewelers Block insurance typically has an “unattended vehicle” exclusion.

Most Jewelers Block insurance is written on a type of policy that in the past was referred to as “all risk;” i.e., the policy covers any loss unless there is a specific exclusion in the policy. It is therefore important for a jeweler to read the Exclusions section of the policy to know what events are not insured, to understand why they are not covered, in order to take appropriate preventive measures.

The list of exclusions of a Jewelers Block policy is not long, but virtually every policy does exclude or severely limit any loss to property left in a vehicle which is not attended (i.e., the “unattended vehicle” exclusion).

Tom was only a short distance away and within sight of his car. Would that not qualify as “attending” the vehicle?

Typical policy wording states that a vehicle is considered to be attended only if a person is actually in or on the vehicle, and that person’s “sole duty” is to attend the vehicle (note that it doesn’t state that the person is required to prevent the loss, but only to be present, i.e., “in or on”).

“In” and “on” are very specific words which leave very little room for interpretation beyond “actual contact” with the vehicle. A person might be standing only inches away from a car yet be neither in nor on it, though technically a person might reach through the plane of an open window and thus be “in” the vehicle without touching it. But we’re engaged in hair-splitting. Tom wasn’t in his car; he wasn’t sitting on the hood; and he wasn’t sticking his hand through the window. Tom was in Billy-Bob’s, ordering lunch. His vehicle was not attended, as that word is defined in the insurance policy.

So in spite of having good records on the property stolen and the right kind of insurance policy, the unattended vehicle exclusion means that the loss is likely not going to be covered by Jerry’s policy. The fact that it was the store customers’ property that was stolen simply makes the situation more difficult for Jerry’s Jewelry.

[Assuming an enviable profit margin of 7-8%, the jewelry store will need to make over $500,000 in retail sales to make up for the loss.]

Isn’t the Unattended Vehicle exclusion only intended for traveling jewelry salespeople?

It is an issue that is of importance to the wholesale aspect of our industry. There’s no question that it makes “life on the road” as a jewelry salesperson very difficult – and dangerous. (Some vendors choose to purchase an exception to the unattended vehicle exclusion by meeting certain requirements of the underwriter – and paying significant additional premium.) But the same Jewelers Block policy applies to all aspects of the jewelry industry; and a retail jeweler who is not aware of the provisions of his policy is destined to have a coverage problem.

Prevention is the best course. In this instance, the loss could have been prevented by an awareness of the policy and by planning ahead.

1. Going directly to the destination without diversion would have been the safest solution; not to say that a loss might not have occurred. There are many ways that Bunny and Clyde might have chosen to waylay Tom, but leaving the property in an unattended vehicle invites the crime – and introduces the exclusion.
2. Or Tom could have waited in line in the drive-through, with the goods safely at his side.
3. Tom could have taken the job pouch into Billy-Bob’s with him – perhaps not a wise choice from a security standpoint, but the property would have remained under the store’s “insurance umbrella.”
4. Planning ahead, Tom could have an associate travel with him – a person who would remain in the vehicle and whose “sole duty” would be to attend the vehicle.
5. The green zipper pouch. Jerry’s Jewelry had established a pattern that exposed them unnecessarily to loss, which could have been avoided by using a variety of nondescript containers for transporting jewelry.

Over the next several months, The Best Policy will select some of the common exclusions of the Jewelers Block policy and cover their meanings and application – with this statement of caveat: Insurance policies are not all the same, and neither do insurance companies interpret their policies in the same manner. There is no substitute to reading your own insurance policy; and specific questions about your coverage should always be addressed to your own insurance carrier.

Bob Carroll is a Certified Insurance Counselor and owner of Robert G. Carroll and Associates. He has specialized in insurance for the jewelry industry for more than twenty-five years representing Jewelers Mutual and other quality carriers in Arkansas, Oklahoma, Mississippi, and Tennessee. E-mail him at bob@robertgcarroll.com. “Jewelry insurance isn’t just what we do, it’s all we do.”