LEGAL PRINCIPLES OF BURGLARY INSURANCE

Principles of Insurance

Insurance:It may be described as a social device to reduce or eliminate risk of life and property. Under the plan of insurance, a large number of people associate themselves by sharing risk through contributing small premiums attached to individuals. The risk can be insured against Life, Fire, Marine, Motor Vehicle, & burglary. Any risk contingent upon these may be insured against at a premium commensurate with the risk involves.

Law and Contract of Insurance:The general principles of law of contract are applicable to the law of Insurance. The contract of Insurance is between two parties whereby one party called Insurer or under writer who under takes the risk in consideration for a fixed sum called premium to pay the other party known as Insured or Policy Holderupon the happening of an uncertain event. Insurance is a contract whereby, in return for the payment of premium by the insured, the insurers make good the losses suffered by the insured as a result of the occurrence of unforeseen events.

An insurer is a company selling the insurance, an insured or policyholder is the person or entity buying the insurance.

Contract of indemnity:

The very foundation for law of insurance is that the contract of insurance in any insurance policy is one indemnity and in case of any loss against which the assured has been insured against, he shall be fully indemnified.  This is the fundamental rule governing the principal rule of insurance and any contention challenging the validity of this rule and denying the assured party indemnity will have to be disregarded and set aside.Therefore all policies of insurance in general contract of indemnity. The character of property insured or the risk inherent on the property are of no consequence.  The insurers are only liable to indemnify the insured as per the value of property at the time of policy was taken out. However, there are some exceptions in this rule. In case,  the insurer agree to pay a fixed sum insured on the happening of a given event for which the insurance policy was taken out irrespective of whether the assured suffers a loss or not then the insurance policy ceases to be a contract of indemnity.

Contracts of burglary insurance are generally contracts of indemnity.  This is because the loss caused in case of burglary can generally be ascertained. However, this may not always be the case.  If the contract stipulates that the insurer agrees to pay a fixed sun irrespective of the amount of loss caused to the assured, it will not be a contract of indemnity.  If such case a clause added to an insurance policy, it is more beneficial to both parties, since, the insurer is hedging his risks against the big losses and the insured is getting a fixed sum on every loss thus giving him security. Therefore, a contract of indemnity can be defined as an insurance policy in which the value of the property is decided fore hand and is binding against both the assured and the insurer.

Meaning and Definition of Burglary

The word burglar comes from the two German words burg, meaning “house”, and  laron, meaning “thief” (literally “house thief”).The  Latin word burgare, “to break open” or “to commit burglary”, from burgus, meaning “fortress” or “castle”, with the word then passing through French and Middle English, with influence from the Latin latro, “thief”.   It is also called breaking and enteringand sometimes housebreaking,is an unlawful entry into a building or other location for the purposes of committing an offence. Usually that offence is theft, but most jurisdictions include others within the ambit of burglary. To engage in the act of burglary is to burgle in British English, a term back-formed from the word burglar, or to burglarize in American English.

Legal Law of Burglary

It can be either actual, such as by forcing open a door, or constructive, such as by fraud or threats. Breaking does not require that anything be “broken” in terms of physical damage occurring. A person who has permission to enter part of a house, but not another part, commits a breaking and entering,  when they use any means to enter a room where they are not permitted, so long as the room was not open to enter.Entering can involve either physical entry by a person, or the insertion of an instrument to remove property. Insertion of a tool to gain entry may not constitute entering by itself and there must be a breaking and entering for common-law burglary. Breaking without entry or entry without breaking is not sufficient for common-law burglary and the common law required that “entry occur as a consequence of the breaking” House includes a temporarily unoccupied dwelling, but not a building used only occasionally as a habitation.

It is the intention to break into a building without any consent with the intent of committing a crime inside. Burglary can be considered as specific intention of burglar who intentionally entering to building to commit a crime. Burglary is also called breaking or entering or housebreaking. This breaking can include actions such as forcing opening a door, or constructive, such as by fraud or threats.  It is an unlawful entry into a building or any other location with an intention of committing an offence. Mostly this offence is theft, but sometimes may jurisdictions include others within the ambit of burglary.

It is for the sake of insurance, burglary is something that occurs when your house or office is broken into by force. For instance, the breaking in of a door or a window to get inside the premises is all signs that the house or office was burgled and robbed. It is also the entering of the property of another with intent to commit a crime therein.

The insurance policies are taken against the loss of burglary, theft have an exhaustive definition of burglary in their respective contracts, but in the absence of precise definition under the law of insurance, recourse must be taken to criminal law to define burglary in terms of THEFT and it is an standard rule of interpretation if technical terms are used in a legal document then they have to be given the special meaning otherwise they have to be given their natural grammatical tendency. To constitute a loss within the meaning, of the policy, it is also a necessary stipulation that the burglary or theft has occurred in order to deprive the assured of the property or valuable permanently. A temporary loss of property would not entitle the assured to recover the value of the property although it may be a criminal offence.

Elements of Burglary

Burglary is the illegal entry of a building with intent to commit a crime, especially theft. Though burglary often involves theft, theft doesn’t have to be committed to be charged with this crime. Entering into a building with the intention of committing a crime is sufficient to be charged with burglary. A person doesn’t have to enter a building forcibly to commit a burglary, entering through an unlocked door or window can also be viewed as burglary.

In the case of theft, burglary usually involves a thief entering a house while the victims are not present and steal their property. If a thief enters your house and steals your valuable when you are absent, it can be termed as a burglary. This type of crime does not involve violence.

Each state has specific definitions of what constitutes burglary, their statutes defining certain elements of burglary that must be in place for an individual to be charged with the crime andsuch elements generally include:

(1) Unauthorized entry,

(2) into a structure,

(3) with intent to commit a crime.

Unauthorised Breaking and Entry:

• This element of burglary involves a person breaking into or entering a structure using force or without authorization from the owner. Simply creating an access does not fulfil the breaking and entry element, as the offender must physically enter the structure. Even forcibly placing one body part inside the structure can constitute burglary, as this constitutes physical entry.

Into a Structure

• This element of burglary requires the offender to enter housing, buildings, or other types of structures, including garages or sheds. Most states do not include abandoned buildings under the definition of buildings and structures when considering burglary charges. Most often, entering an abandoned building is classified as trespassing.

Intent to commit a crime

• The intent element of burglary requires the offender to have intent to commit a crime inside the structure they have entered. Such a crime may include anything from theft or fraud, to assault.

Aggravated burglaryit is the same as a regular burglary, except for one key difference and it means, if an individual breaks into a home with the intent to steal or sexually assault someone, this is enough for the individual to charge with aggravated burglary.

Night time: It is defined as hours between half an hour after sunset and half an hour before sunrise.

Typically this element is expressed as the intent to commit a felony “therein”. The use of the word “therein” adds nothing and certainly does not limit the scope of burglary to those wrongdoers who break and enter a dwelling intending to commit a felony on the premises. The situs of the felony does not matter, and burglary occurs if the wrongdoers intended to commit a felony at the time they broke and entered.

Theft:In common usage, theft is the taking of another person’s property or services without that person’s permission or consent with the intent to deprive the rightful owner of it.The word is also used as an informal shorthand term for some crimes against property, such as burglary, embezzlement, larceny, looting, robbery, shoplifting, library theft, and fraud (obtaining money under false pretences).  In some jurisdictions, theft is considered to be synonymous with larceny, in others, theft has replaced larceny. Someone who carries out an act of or makes a career of theft is known as a thief. The act of theft is also known by other terms such as stealing, thieving, and filching.

You may have visitors and helps commonly visiting your house. Although they may not intentionally steal anything, but there is every bit of a possibility that some household items may be lost – valuable and not valuable. In case of not so valuable items, say daily-use utensils, the concern may not be much. But, what if you lose a valuable diamond ring and such a loss could be a theft during the normal course of activity in your house. You may discover such a loss over time and not instantly. Such losses are not covered under the insurance policy as it is not treated as burglary.

It means a person committing the crime had access to the house or its valuables. For example: you may have dropped the keys of your house near the door and come back home to discover your jewellery stolen. This is more a case of negligence. (The insurer could say that you should have kept the keys safely. The reason why insurers don’t cover theft is because it is difficult to administer and often can be due to negligence or theft inside the house is assumed to be negligence by the insurer and is hence not covered. The reason why insurers do not service such claims is because of the difficulty of ascertaining the loss due to negligence or actually the intentions of someone to actually steal and rob the owner. Some insurers do offer additional add on theft cover.)

Taxes are being legalised in other form of theft and is no difference than executing criminals being legal and taxes are not theft, but it is a penalised price we are paying for well-being in a civilised society.

Aggravated form of theft: Robbery and Dacoityis also falls within the ambit of burglary definition, since they are aggravated form of theft

Limitations of Theft Insurance

Every insurance policy has some limitations and a theft insurance policy will not offer compensation for the following items or you will need to buy it as an add-on cover.

The limitations may vary from one insurance provider to another, but does not cover:

• Precious metals such as gold, silver, precious stones, gems and cash
• By Involvement of family members or items that were stolen by them
• Stealing of share certificates is also not covered
• Things that were robbed by any of the employees
• Things that were robbed by housemaids
• Theft during riots, war, strikes, natural calamities, and terrorist activities
• stocks whose value will vary as per the market conditions,
• Theft conducted on the premises that were left unattended
• Theft conducted on the premises that were not properly locked
• Premises where security is not maintained
• Forged theft to claim benefits from a theft insurance policy
• Robbery and Dacoity also falls within the scope of burglary, since, they are also aggravated form of theft.
• In the case of theft, burglary usually involves a thief entering a house while the victims are not present and steal their property. This type of crime does not involve violence.

……To be continued in next issue

Authored by:

R. Venkatesan
BA, BGL, AIII, DIL.
Ex.Senior Assistant/
In House Surveyor,
United India Insurance Co. Ltd, Trichy