Scarola v. Insurance Co. of North America

An innocent purchaser for value of a stolen vehicle is entitled to recover its value under the theft coverage of the insurer’s policy. Contrary to the contention of the appellant insurer, such an insured has a lawful and substantial economic interest as required by section 148 of the Insurance Law. Neither the manner of his acquisition nor his possession of the vehicle can be said to he unlawful. His substantial economic interest is sustained by the amount of money that he parted with in obtaining possession and colorable ownership of the vehicle. Although there is a division of authority as…