Most policies have an exclusion in them for voluntarily parting with something. In the car dealership business, they have special coverage for when someone comes in to test drive a car, gives them a fake id, they voluntarily hand over the car keys to test drive, and the car doesn’t come back. In most all other areas of property insurance, when you voluntarily give something away, you can’t tell the insurance company that it’s been stolen and you want them to pay for it.

This happened on an airplane years ago. A client of mine was trying to sell his airplane. A guy came to look at it, and they kind of became buds as they flew around. The guy said, “I’ll buy it.” He signs the agreement, but then he says, “I don’t have any money with me. How about I fly the plane back to Phoenix. I’ll return the day after tomorrow with the cashier’s check.” Believe it or not, my client gave him the keys to his airplane, and as you might expect, never heard from the guy again.

This very important client of mine is telling me the story, and when he tells me that he gave the guy the keys, I say, “I don’t think you have a stolen airplane. At the moment, I think you have a bad debt.” Because he got a signed agreement and just didn’t have the money, but he voluntarily parted with the plane, this was going to be a problem for him to get his airplane claim covered.

In a crazy turn of events, luckily for him, the plane did turn up. They actually found the plane again after it most likely ran a bunch of drugs across the border to Canada and was abandoned up in Washington. They brought it back to California, and because no one knew what the plane went through, they said they needed to do the annual inspection.

The story gets crazier as a fixed base operator, which is another name for airline airplane mechanic service center, does the annual inspection in which they check all of the vital systems to make sure everything is working properly and nothing is damaged. One thing didn’t work: the little light on the front landing gear. It would fold up, and the light, which they thought was just not working, was saying that the landing gear was not locking into position. Our fixed-based operator takes the airplane up, flies it around, and brings it in for landing…and the nose gear folds up this time, causing the propeller to hit the runway. Now we’ve got a really screwed-up airplane. To make the story even more interesting, the operator didn’t even qualify to fly it.

Getting back to insurance, voluntarily parting is a big issue with crime policies and social engineering. There are a few ways to provide insurance coverage when someone is swindled out of money. If you have a crime policy for example, have your agent make sure that the voluntarily parting exclusion is eliminated or some kind of social engineering endorsement is added to make sure events like this are covered.