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Wear and Tear Exclusions Versus Depreciation For Resulting Damage To Worn And Tower Older Parts Of A Structure | Property Insurance Coverage Law Blog



Buy Bill Wilson's book! This is the least I can say after quoting him about "resulting" or "ensuing" loss commission following "wear and tear" exclusionary language.

Here is what he says:

Wear and Tear Exclusions

Just about all that needed to be said on this subject was discussed in the definitions section of this chapter. The only thing I add is an anecdotal caution that, of all the wear and claim denials that agents have brought to my attention, the majority were improperly denied. Now, admittedly, they were probably only attracted by the agent was convinced of this, so I want to imply that most of all wear and tear claims are improperly denied. Just be the denier or deny-ee (I may have just invented another new word).

If a wear and tear exclusion applies, it often applies ONLY to the property that is worn and torn , not causing damage. In many cases, wear and tear impacts valuation and not coverage. If you have a condition or maintenance issue, that should be discovered and dealt with during the property inspection and underwriting phase, not after loss occurrence other than its possible impact on an ACV valuation. 1

These situations happen all the time. The judge made his own example of old bolts giving way and then the rest of the bolts failed to hold up, crashed and broke the rest of the old structure. The worn-out bolts may not be covered, but if you have the right order, the rest of the loss is covered — even if the rest is old.

The older parts of the structure is the ensuing loss. They did not suffer because they were worn out and broke. They suffered a loss because other parts of the structure broke from "wear and tear." If replaced, they are then valued at Replacement Cost

Please read the “resulting” or “ensuing” loss provisions carefully. Depending on the language, you can get a different result

If you are a public adjuster, insurance agent or an insurance adjuster trying to wrestle with a hard to understand coverage commission and not make a wrong decision, please buy this book and use it. Insurance is important.

Beauty is an intangible thing; can not be fixed on the surface, and the wear and tear or old age on the body cannot defeat it. Nor will a "pretty" face make it, for "pretty" faces are often dull and empty, and beauty is never dull and it fills all spaces.
—Robert Henri
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See See William C. Wilson, Jr., CPCU, ARM, AIM, AAM, When Words Collide: Solving Insurance Coverage and Claims Disputes (1st ed. 2018) (Emphasis added).


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