false pretense, trick, and device
Refers to an exclusion in the physical damage coverage portion of a garage
coverage form eliminating coverage for losses the insured suffers due to the
fraudulent acts of others. Examples of false pretense include a customer absconding
with an automobile on the pretense of test-driving it; the insured selling an
automobile and receiving a bad check for it; and the insured selling an automobile
and being instructed to deliver it to the wrong party because of fraudulent
instructions. The exclusion can be negated by adding false pretense coverage
on the garage liability policy. This endorsement covers the insured when a covered
automobile is taken in a fraudulent manner. It also covers losses caused by
the insured's acquiring an automobile from someone who did not have legal title
to the vehicle. Coverage is most needed by automobile dealers but may also be
desired for banks that sell repossessed autos to the public.
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