Can an insurer force an insured to press charges against someone for theft if that person has agreed to make restitution?

UPDATED: Sep 29, 2010

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Can an insurer force an insured to press charges against someone for theft if that person has agreed to make restitution?

I am on staff at a local church. We have a member that stole some stuff from our church. We don’t want to press charges because he is only 19 and he has never done anything like this before and he is obviously sorry for what he did. Our insurance company cut us a check and we replaced the items before he admitted to it. Our insurance company is now telling us that we must press criminal charges against this boy or we will be forced to pay back the money. The boy is willing to make an agreement with the insurance company for restitution. Is this legal for the insurance company to do? Can they force us to press charges? Isn’t it our decision? The boy already made a recorded statement at the local police station. I don’t see why we should be forced to do this.

Asked on September 29, 2010 under Insurance Law, Louisiana


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

Your church presumably made a claim for theft. The insurer paid it out. However, theft is a crime--for there  to be a claim for theft, there must actually have been theft. If there was not--i.e. if nothing occured for  which theft charges should be placed--that could be insurance fraud; at the very least, the event which would have given rise to a claim did not occur. If it was not theft, then you *should* return the money to the insurer: you can't have it both ways, keeping a check for theft but not reporting it as theft or pressing charges. Why not return the check to the insurer and have the perpetrator work out a restitution or repayment arrangement directly with your church? That would avoid charges, get the money back to the insurer, and have restitution come into your church.

It is common, if not  nearly universal, for insurers to only pay out on theft claims if the insured presses charges against the thief (if the thief's identity is known).

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