Years ago, it was common for insurance companies to write “named perils” insurance policies, which only covered the types of losses listed in the policy. That is why older policies were called “fire policies,” because they often covered risks associated with fire or other specific events. Today, most policies are written as “all risks” policies, which means they cover any type of catastrophic event, unless the type of loss is specifically excluded.
How An All-Risk Insurance Policy Works
All-risk insurance policies to cover your personal or commercial property are generally more expensive because they are more comprehensive. Under an all-risk policy, the policyholder must demonstrate a covered loss was sustained during the policy period. Then, the insurance company is supposed to have to cover the loss unless an exclusion in the policy specifically says they don’t have to pay. However, many insurers are crafty and include various exceptions in these all-risk policies, one of which is called a “wear and tear” exclusion.
Insurance companies routinely include exclusions in their policies for “wear and tear.” These provisions are designed to keep the insurer from being liable when its insured fails to properly maintain, repair, and replace deteriorated and/or defective portions of its insured property. The named exclusions and limitations are what actually determine if a property loss is covered. As you might imagine, the lists of exclusions are generally extensive. Unfortunately, many insurance companies will claim damage is from wear and tear, even if it isn’t, in an effort to avoid a contractual payment.
When there is a natural disaster like a hailstorm, hurricane, tornado, or flood, insurers will very commonly try to pin the blame for property damage on a preexisting condition. One of the most common exclusions that insurance companies invoke to deny claims is “wear and tear.” Other common exclusions include poor maintenance, prior damage, manufacturing defects, or faulty installation. An example of this is with roof damage claims – insurers often point to the age of the roof or the maintenance record for the roof as reasons why the roof is damaged, instead of that it suffered hailstorm damage.
A false claim by an insurance company that damage resulted from wear and tear can often result in an insurance bad faith lawsuit. This excuse is particularly common on commercial properties that are aging, even if they are in good shape. Many times, the insurance company will inspect the property prior to selling the insurance policy and these underwriting reports show the property was in acceptable or even good condition, but the insurance company still trots out their war horse excuse that the damage resulted from wear and tear. In these types of situations, the insurance company may be denying the claim improperly.
Raizner Slania Commercial Insurance Attorneys
If you submitted a claim for your business, and your insurance company is asserting that the damage resulted from wear and tear and is not covered, you should contact the commercial property insurance lawyers of Raizner Slania today. Our attorneys have extensive experience dealing with insurance company tactics. We have taken action to address many serious violations of insurance law by insurers, including when insurers falsely claim that the damage was pre-existing or resulted from wear and tear, poor maintenance, or manufacturing problems.