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Even worse, it sounds like this is a standard practice in the insurance industry. Insurance always carries a steep moral hazard in the form of the temptation t

Even worse, it sounds like this is a standard practice in the insurance industry. Insurance always carries a steep moral hazard in the form of the temptation to sell deceptive peace of mind, fooling their client into thinking they have purchased insurance covering a scenario which the company has no intent of actually covering. Few people will ever actually discover the deception, so it's reliably profitable. I had not heard of the "voluntary parting is not theft" schtick before today and in the absence of a prominent warning about this distinction I would consider such an insurance sale fraudulent. Further, I'd want a large punitive multiplier on the fines to account for the fact that most of the time the deception will go undiscovered. I strongly suspect our legal system would disagree, and I'd consider that an even bigger problem.

droithomme 7y ago
Our legal system does disagree, it is theft. The voluntary parting is a concept invented by insurance companies to deny liability. It has nothing to do with criminal law which sees this as prosecutable criminal theft.
- hapless 7y ago
  It depends on the state you live in, but by and large, it is not the same. For example, in my home state, reneging on a rental agreement on a piece of property worth more than $100 is "Misapplication of Property," a misdemeanor. Actually stealing the exact same camera, as opposed to deceiving the owner, is "Larceny," a felony. Holding up the owner at gunpoint to steal the same camera is "Robbery," a much more serious felony. The law slices and dices these things finely. Sweet talking someone into handing over his property is often a crime, but it is usually not the same crime as simply taking it.
- jellicle 7y ago
  This is incorrect. If you give over a piece of property to someone with a contract, and they fail to fulfill the contract, you've got a civil claim against them but it's not generally a crime. Example: someone leases a car and doesn't make payments. Leasor can't call the police and claim "Janet stole my 2018 Cadillac, she stopped making payments two months ago!". Or, they can, but will be told: It's not theft.
  - droithomme 7y ago
    https://criminal-law.freeadvice.com/criminal-law/white_collar_crimes/no_return_owner.htm https://criminal-law.freeadvice.com/criminal-law/white_colla... > A key element of any larceny or theft crime is what an offender intends to do with the property after taking it. Typically, an offender is guilty of a theft crime when he takes the property of another with the intention of permanently depriving him of it. Deciding later to keep the property an offender originally intended to use temporarily and then return becomes a larceny or theft crime at the moment the offender's intent changes. The perfect example of this is a rental car you decide not to return. A lawful rental becomes a larceny or theft crime the moment you fail to return it on time with the intention of keeping it. Other sources agree: https://www.chamberslawfirmca.com/can-charged-grand-theft-not-returning-rental-car/ https://www.chamberslawfirmca.com/can-charged-grand-theft-no... https://www.mdtriallawyer.com/failure-to-return-rental-vehicle.html https://www.mdtriallawyer.com/failure-to-return-rental-vehic... https://law.freeadvice.com/general_practice/contract_law/TV_rental_overdue_payment.htm https://law.freeadvice.com/general_practice/contract_law/TV_... Many state laws agree: https://apps.leg.wa.gov/RCW/default.aspx?cite=9A.56.096 https://apps.leg.wa.gov/RCW/default.aspx?cite=9A.56.096 (Note here both that the law here explicitly states that not returning a leased or rented item is theft, and that it is specifically presumed so when one uses a false id or address.) https://www.criminaldefenselawyer.com/resources/auto-theft-laws-texas.htm https://www.criminaldefenselawyer.com/resources/auto-theft-l... https://www.criminaldefenselawyer.com/resources/auto-theft-laws-florida.htm https://www.criminaldefenselawyer.com/resources/auto-theft-l... Including the state where the above guy lives: https://codes.findlaw.com/ca/penal-code/pen-sect-484.html https://codes.findlaw.com/ca/penal-code/pen-sect-484.html The claim that it's simply a civil contract issue with no criminal implications is not correct. Given that the thief in the above case also used a false identity, he is guilty of identity theft as well.
mannykannot 7y ago
It does not seem that the insurance company has deceived anyone about what is and is not covered. The deception is in how KitSplit insinuates that renters are covered when they are not.
- jjoonathan 7y ago
  Whoever sold the insurance to the end customer did the fraud. In this case, that probably mean KitSplit, but this sort of thing is rampant across the insurance industry proper. Branding this as a sharing economy issue undersells the problem by an order of magnitude or two.
speeder 7y ago
Completely unrelated but... I had a issue with lightning instead. We were paying some rather expensive home insurance, one time a thief broke inside, and they did all they could to avoid paying us, ended paying the bare mininum they could, barely covering the stolen goods costs. Still at the time it didn't looked like bad faith, just fraud checking... But then this time lightning hit our house, the insurance response was that unless we can prove it was a direct strike against the house, it would count as "electrical fault" that is not covered, because it would be blamed on the electric company instead... So we argued that yes, the lightning DID hit our house directly (because well, it did, the path the electricity did was very obvious, with the endpoint being the pointy metal end of the structure that holds our gate upright), they just flat out refused to come check, because the likelihood of this happening was so low that they were sure it was a waste of their time to check, and that we should bother the electricity company... The electricity company in turn, said they detected zero fluctuations on the grid, and would not send a technician to check, that it wasn't their fault. So that day I learned that "lightning coverage" only cover a strike on the hourse itself... a strike on the lamp-post right outside for example, doesn't count, even if it blows up everything inside your house, becase the "fault" then is the electric company.
- 3JPLW 7y ago
  My recent encounter with this comes from healthcare. Healthcare companies love to brag that their "prenatal maternity care is 100% covered, no deductible, no copay." Turns out "prenatal maternity care" is simply defined as the blood pressure, weight, and fundal measurements. That's all that bullet point means. * Ultrasound? Well, that's different. It's a lab procedure. Yep, even the 20-week "standard" anatomy scan. * Get a non-stress test done (literally just 10 minutes worth of heart-rate monitoring)? Then it becomes a "specialist visit." You'll pay for that. * Get any bloodwork done? Even if it's for the mother's health and not trying to do some sort of pre-natal screening? It's a diagnostic lab procedure. * Urine samples for pre-eclampsia? Diagnostic testing. * Mandatory (state-required) STD panel? That's diagnostic testing, too. Turns out the ACA requires "pre-natal care" to be covered, so bragging about it in the first place is just absurd.
- dclowd9901 7y ago
endorphone 7y ago
It really isn't fair to blame insurance at all. In this case they had insurance that covers the rentee against loss due to accidental damage or theft against the rentee. That insurance is entirely reasonable and rational, and does have real value: If a legitimate, good actor person rents hardware and then it get stolen out of their car or they accidentally drop it in a lake, that's valuable insurance and does probably cover most incidents. But in this case the person theoretically covered by the insurance (their coverage obviously benefitting the one renting out the hardware, as their hardware is then made whole) is the one who caused the loss. Just as your homeowner insurance doesn't want to cover you if you burn down your own house on purpose -- the real moral hazard -- they don't want to cover this situation. It's shitty, but the insurance served a valuable but finite purpose. The insurance was never intended for what happened here.
- jjoonathan 7y ago
  Finite scope of insurance: not a problem. Deceptive marketing suggesting that the scope of an insurance policy is larger than it actually is: big problem.
go_ruby 7y ago
The concept also exists as "theft by conversion". For example if you rent a car and refuse to return it.

droithomme 7y ago

Our legal system does disagree, it is theft. The voluntary parting is a concept invented by insurance companies to deny liability. It has nothing to do with criminal law which sees this as prosecutable criminal theft.

hapless 7y ago
It depends on the state you live in, but by and large, it is not the same. For example, in my home state, reneging on a rental agreement on a piece of property worth more than $100 is "Misapplication of Property," a misdemeanor. Actually stealing the exact same camera, as opposed to deceiving the owner, is "Larceny," a felony. Holding up the owner at gunpoint to steal the same camera is "Robbery," a much more serious felony. The law slices and dices these things finely. Sweet talking someone into handing over his property is often a crime, but it is usually not the same crime as simply taking it.
jellicle 7y ago
This is incorrect. If you give over a piece of property to someone with a contract, and they fail to fulfill the contract, you've got a civil claim against them but it's not generally a crime. Example: someone leases a car and doesn't make payments. Leasor can't call the police and claim "Janet stole my 2018 Cadillac, she stopped making payments two months ago!". Or, they can, but will be told: It's not theft.
- droithomme 7y ago
  https://criminal-law.freeadvice.com/criminal-law/white_collar_crimes/no_return_owner.htm https://criminal-law.freeadvice.com/criminal-law/white_colla... > A key element of any larceny or theft crime is what an offender intends to do with the property after taking it. Typically, an offender is guilty of a theft crime when he takes the property of another with the intention of permanently depriving him of it. Deciding later to keep the property an offender originally intended to use temporarily and then return becomes a larceny or theft crime at the moment the offender's intent changes. The perfect example of this is a rental car you decide not to return. A lawful rental becomes a larceny or theft crime the moment you fail to return it on time with the intention of keeping it. Other sources agree: https://www.chamberslawfirmca.com/can-charged-grand-theft-not-returning-rental-car/ https://www.chamberslawfirmca.com/can-charged-grand-theft-no... https://www.mdtriallawyer.com/failure-to-return-rental-vehicle.html https://www.mdtriallawyer.com/failure-to-return-rental-vehic... https://law.freeadvice.com/general_practice/contract_law/TV_rental_overdue_payment.htm https://law.freeadvice.com/general_practice/contract_law/TV_... Many state laws agree: https://apps.leg.wa.gov/RCW/default.aspx?cite=9A.56.096 https://apps.leg.wa.gov/RCW/default.aspx?cite=9A.56.096 (Note here both that the law here explicitly states that not returning a leased or rented item is theft, and that it is specifically presumed so when one uses a false id or address.) https://www.criminaldefenselawyer.com/resources/auto-theft-laws-texas.htm https://www.criminaldefenselawyer.com/resources/auto-theft-l... https://www.criminaldefenselawyer.com/resources/auto-theft-laws-florida.htm https://www.criminaldefenselawyer.com/resources/auto-theft-l... Including the state where the above guy lives: https://codes.findlaw.com/ca/penal-code/pen-sect-484.html https://codes.findlaw.com/ca/penal-code/pen-sect-484.html The claim that it's simply a civil contract issue with no criminal implications is not correct. Given that the thief in the above case also used a false identity, he is guilty of identity theft as well.

mannykannot 7y ago

It does not seem that the insurance company has deceived anyone about what is and is not covered. The deception is in how KitSplit insinuates that renters are covered when they are not.

jjoonathan 7y ago
Whoever sold the insurance to the end customer did the fraud. In this case, that probably mean KitSplit, but this sort of thing is rampant across the insurance industry proper. Branding this as a sharing economy issue undersells the problem by an order of magnitude or two.

speeder 7y ago

Completely unrelated but... I had a issue with lightning instead. We were paying some rather expensive home insurance, one time a thief broke inside, and they did all they could to avoid paying us, ended paying the bare mininum they could, barely covering the stolen goods costs. Still at the time it didn't looked like bad faith, just fraud checking... But then this time lightning hit our house, the insurance response was that unless we can prove it was a direct strike against the house, it would count as "electrical fault" that is not covered, because it would be blamed on the electric company instead... So we argued that yes, the lightning DID hit our house directly (because well, it did, the path the electricity did was very obvious, with the endpoint being the pointy metal end of the structure that holds our gate upright), they just flat out refused to come check, because the likelihood of this happening was so low that they were sure it was a waste of their time to check, and that we should bother the electricity company... The electricity company in turn, said they detected zero fluctuations on the grid, and would not send a technician to check, that it wasn't their fault. So that day I learned that "lightning coverage" only cover a strike on the hourse itself... a strike on the lamp-post right outside for example, doesn't count, even if it blows up everything inside your house, becase the "fault" then is the electric company.

3JPLW 7y ago
My recent encounter with this comes from healthcare. Healthcare companies love to brag that their "prenatal maternity care is 100% covered, no deductible, no copay." Turns out "prenatal maternity care" is simply defined as the blood pressure, weight, and fundal measurements. That's all that bullet point means. * Ultrasound? Well, that's different. It's a lab procedure. Yep, even the 20-week "standard" anatomy scan. * Get a non-stress test done (literally just 10 minutes worth of heart-rate monitoring)? Then it becomes a "specialist visit." You'll pay for that. * Get any bloodwork done? Even if it's for the mother's health and not trying to do some sort of pre-natal screening? It's a diagnostic lab procedure. * Urine samples for pre-eclampsia? Diagnostic testing. * Mandatory (state-required) STD panel? That's diagnostic testing, too. Turns out the ACA requires "pre-natal care" to be covered, so bragging about it in the first place is just absurd.
dclowd9901 7y ago

endorphone 7y ago

It really isn't fair to blame insurance at all. In this case they had insurance that covers the rentee against loss due to accidental damage or theft against the rentee. That insurance is entirely reasonable and rational, and does have real value: If a legitimate, good actor person rents hardware and then it get stolen out of their car or they accidentally drop it in a lake, that's valuable insurance and does probably cover most incidents. But in this case the person theoretically covered by the insurance (their coverage obviously benefitting the one renting out the hardware, as their hardware is then made whole) is the one who caused the loss. Just as your homeowner insurance doesn't want to cover you if you burn down your own house on purpose -- the real moral hazard -- they don't want to cover this situation. It's shitty, but the insurance served a valuable but finite purpose. The insurance was never intended for what happened here.

jjoonathan 7y ago
Finite scope of insurance: not a problem. Deceptive marketing suggesting that the scope of an insurance policy is larger than it actually is: big problem.

go_ruby 7y ago

The concept also exists as "theft by conversion". For example if you rent a car and refuse to return it.