Why might an insured be unsuccessful in claiming a theft loss for a personal computer seized by law enforcement under an HO-3 policy?

An insured may be unsuccessful in claiming a theft loss for a personal computer seized by law enforcement under an HO-3 policy due to the Governmental Action exclusion. This exclusion typically states that losses caused by governmental actions, such as the seizure of property by police or other governmental entities, are not covered by the policy. When an item is seized as part of a legal investigation or due to suspected criminal activity, it is not considered a theft in the traditional sense because it has not been unlawfully taken for private use; rather, it is being held by authorities for legal reasons.

Understanding the nature of the seizure is crucial. In this situation, since the computer was taken by law enforcement and not stolen, it reflects a governmental action, which the policy does not cover. This means that even if the insured believes they have a claim for loss, the specific language of the HO-3 policy would exclude such claims related to property lost due to government actions.