Ask an Expert


The client had a mutual agreement to swap his vehicle for another vehicle with a third party.

However, a disagreement broke out, and our client’s vehicle was taken with the keys and was left with no vehicle.

The client states that he was threatened and so ran away and the TP took the vehicle as well.

The client was not aware of where the vehicle went and was therefore reported to the police.

The police then found the vehicle but was impounded and have asked the client to collect the vehicle. There is no damage but the client needs to get a locksmith out to change the locks and provide them with a key.

The insurer has stated that there is no cover and that this is a civil matter, as the client knew who the TP was, and had the intention of selling the vehicle.

Although, agree at large, we are only claiming for the locksmith and key costs.

We believe the insurer should pay for the costs based on the below:


Keys and locks

“We’ll cover you for the cost of replacing the keys and locks for your car following theft, loss or the unauthorised duplication of your keys during the period of insurance.

“The most we’ll pay is $3,000 for any one loss. If you’ve got another policy with us which also covers these costs, the most we’ll pay you is $3,000 in total under all of the policies for any one event.”

An excess of $100 applies to each claim.

We know the TP took the keys and there is no indication that they did not duplicate the key and we cannot penalise the client on the assumption it wasn’t duplicated. It is also technically theft as the client did not know where the vehicle was or that a fair transaction was completed.

Crossley Gates replies:

I suggest the fact that a (civil) dispute arose between parties does not necessarily invalidate a claim. The focus should always be on the insuring clause.

Based on the facts stated above, the TP converted the vehicle into his possession. This amounts to an unauthorised and accidental physical loss of the vehicle from the insured's point of view. The insured has found the vehicle again thanks to the Police, but the keys to the vehicle remain accidentaly lost from the insured's point of view.

The keys cover insures the cost of replacing the keys/locks '... following ... loss ... of your keys during the period of insurance'. The keys remain lost so it is hard to see why the keys cover does not apply.

December 2021

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