Tangled tale: The case of the insurance company, the FBI and the stolen Ferrari

Kevin Lyons

October 11 update: A judge dismissed the lawsuit against the government over the wreck of the $750,000 Ferrari driven by an FBI agent.

In making the ruling, Judge Avern Cohen said federal law grants immunity if property is being held by law enforcement.

When an insurance company ends up in court, it’s usually because the company is disputing a claim or is testifying in an insurance fraud case. But a court case recently filed in Michigan is anything but normal when it comes to insurance — it involves the FBI and a damaged car valued at three-quarters of a million dollars.

Motors Insurance Corp. v. United States Department of Justice started with the September 2003 theft of a $750,000 Ferrari F50 from Algar Ferrari/Maserati, a dealership in Rosemont, Pa. After the theft, the dealer submitted a claim to Southfield, Mich.-based Motors Insurance; the claim was paid. After making the payout, Motors Insurance assumed ownership of the two-door convertible.

A Ferrari like this one is a the center of a dispute between an auto insurance company and the FBI.

In August 2008, the FBI, working with local authorities, located the stolen Ferrari in Kentucky. The FBI decided to keep the car as it investigated the theft. In May 2009, one of its agents, Frederick Kingston, took the car out for a spin, along with Assistant U.S. Attorney J. Hamilton Thompson.

According to court records, Kingston lost control of the Ferrari, then “fishtailed and slid sideways” before striking a curb, some bushes and a small tree. The accident apparently took place in Kentucky.

In June 2009, the FBI reported the accident to Motors Insurance. Motors Insurance then submitted a claim to the Department of Justice and the FBI for $750,000. The Justice Department denied the claim — twice — saying the accident “took place when the Ferrari was being detained by the FBI.”

So, on Feb. 24, 2011, Motors Insurance filed a Freedom of Information Act requesting that FBI release documents concerning “the negligent use and destruction of a 1995 Ferrari F50.” Motors Insurance is a subsidiary of GMAC Insurance.

Justice Department spokesman Charles Miller told the Detroit News: “Needless to say, we need to see the suit and make a determination on how we’d respond in court.”

From 1995 to 1997, Ferrari made only 329 of the F50’s. The car features an engine inspired by high-performance Formula 1 race cars. The F50 can reach 60 miles per hour in 3.7 seconds and can hit a top speed of 203 mph.