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Insurance Company Owns Property That Is Lost Then Found

home owners insurance
feldman_amy Amy Feldman
Amy E. Feldman is a business commentator and legal business...
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By Amy E. Feldman

PHILADELPHIA (CBS) - What if you get insurance money for a stolen item that later is located and returned to you?

In a single week last month, it was reported that a Corvette stolen in 1979 was found and returned to its original owner; that a class ring from 1953 was found sixty years after it was lost; and that a dog coughed up an engagement ring that had gone missing 5 years ago. Sounds like someone could have used some roughage for five years.

Assuming all those people reported their missing items to the insurance company and were paid for them, what do they do now? What’s your legal obligation to return money or property that was bought after an insurance claim was paid when the original item shows back up?

While every insurance weasel will tell you that each claim is based on the specific language of the policy (so check your policy), in most cases, policies covering loss of property almost always have a “right of salvage” provision, which means basically that the insurance company is the new owner of the old property.

While that’s usually fine – good, give me the money and you can keep the non-existent ring – if the insurer pays you for its loss, and the property is later recovered, it becomes the insurance company’s property.

In many cases, a car owner is required to turn over the title before getting the check in case it turns back up – and if it does, the insurance company has the right to sell it, junk it, or keep it.

But if it was coughed up, I hope whatever they do they wash it first.

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