“IN USE” CONDITION DETERMINED THEFT COVERAGE

A Marine policy covering a speedboat contained the following wording: “It is hereby warranted that the insured vessel is stored or kept in a marina, locked garage or locked storage building when not in use.” The meaning of “in use” was crucial to the application of coverage for theft of the boat.

The insured had taken the boat and trailer from its locked storage building, adjacent to his place of business. It was then towed via truck to a service facility for washing. During the return trip, just a block away from the storage building, one of the trailer wheels locked up. The insured was able to drag the boat to the entrance of the building. However, the wheel problem would not allow backing the trailer up an incline and into the building. He intended to return the same day to replace the wheel. However, pouring rain delayed his return to the following day. He discovered that the truck, trailer, and boat had been stolen.

The insurer’s denial of liability on the basis of the quoted warranty resulted in a lawsuit. Trial court judgment in favor of the insured was appealed by the insurer.

The appeal court said that “the term ‘in use’ as used in an insurance policy will vary with the item insured and the particular circumstances of the loss.” It also said that the boat was “in use” when it was taken for cleaning and described the breakdown as part and parcel of such use. It concluded that the temporary leaving of the boat under the circumstances was “reasonable and expected use.” The boat was “in use” with respect to policy coverage when the theft occurred.

The judgment of the trial court, in favor of the insured, was affirmed.

Wilcox, Appellee v. Holloway Et Al., Appellants. Tennessee Court of Appeals, Eastern Section. Filed December 17, 1982. Affirmed. CCH 1983 Fire and Casualty Cases 588.