Over the years, I’ve responded to requests from agents whose customers have had claims denied under auto policies, with the “wear and tear” and/or “mechanical breakdown” exclusions being cited. For example:

  • Water in the fuel tank damaged the engine
  • Travel trailer flooring damaged due to freezing
  • Wiring harness caught fire and damaged fuel pump
  • Radiator leak damaged engine
  • Air cleaner came loose and dirt entered and caused engine damage
  • Rubber from a tire blowout damaged a fender, hood and firewall

Most recently, I became aware of a claim involving water damage to the interior of an auto as a result of heavy rain that was able to seep through sun roof seals that were damaged by clogged drains. The adjuster cited the aforementioned exclusions, along with “no regular maintenance.” The carrier used the 2005 ISO PAP.

First of all, the ISO PAP has no exclusion for “no regular maintenance.” There is nothing in the policy that mandates that an insured maintain anything at all. The closest thing might be the requirement to take reasonable and appropriate action to prevent further loss.

Second, with regard to wear and tear and mechanical breakdown, this is what the ISO PAP says:

2. Damage due and confined to:

a. Wear and tear;

b. Freezing;

c. Mechanical or electrical breakdown or failure; or

d. Road damage to tires.

This Exclusion (2.) does not apply if the damage results from the total theft of “your covered auto” or any “non-owned auto”.

Notice the “and confined to” language. The exclusion applies only to the actual property that is worn or torn, not to ensuing loss. IF the seals were worn out, there would be no coverage for the seals, but the ensuing water damage would be covered.

Given the number of such improper claim denials over the years that I’ve personally seen, there are likely many thousands of legitimate claims that went unpaid. This is another area where an agent earns his or her commission…by advocating for the customer. But to do that, you have to know what the policy does and doesn’t cover. The only way to know that is by self-directed learning and choosing quality CE, not what all too often passes for “education” today.

Photo by CJS*64


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Bill Wilson

Founder at InsuranceCommentary.com
One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information