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A Video Explaining Wear and Tear and Inherent Vice  

https://zalma.com/blog

 Wear and Tear  

It is inevitable that objects deteriorate over time and wear out. Even  the pyramids in Egypt show wear and tear after more than 4000 years  being abused by sand and wind storms.  Recent decisions of the courts of appeal have gone through such changes  that even an inherent vice of the insured property\\u2014a condition certain  to result in loss\\u2014rarely falls within the parameters of a non-fortuitous  loss.  The Restatement of Contracts 291, Comment a, holds that a loss is not  fortuitous \\u201cif it results from an inherent defect in the object damaged,  from ordinary wear and tear, or from the intentional misconduct of the  insured.\\u201d  In a case dealing with a boat that was left completely uncovered in the  Bahamas during the rainy season, \\u2018normal wear and tear\\u2019 resulted in the  sinking of the boat. Rainwater entered the boat, forcing the bilge pump  to operate continuously for several days. This drained the boat\\u2019s  battery, causing the pump to stop functioning. Batteries do not last  forever. While the battery may have had enough power to start the  engine, it obviously did not have enough power to operate the bilge pump  for two days. The deterioration of a battery constitutes normal wear  and tear, is not fortuitous, and is not compensable under a policy of  insurance.  We think it inappropriate to cause the insured to suffer a forfeiture by  concluding, with the aid of hindsight, that no fortuitous loss  occurred, when at the time the insurance took effect only a risk was  involved as far as the parties were aware. See Millers Mutual Fire  Insurance Co. v. Murrell, 362 S.W. 2d 868, 870 (Tex. Civ. App. 1962). De  Guinee v. Insurance Co., 724 F. 2d 369 (3rd Cir. 12/22/1983).  In Compagnie des Bauxites de Guinee v. Insurance Company of North  America, 724 F. 2d. 369 (3d Cir. 1983), an insured brought suit against  its all-risk insurer to recover business interruption losses arising  from the structural failure, collapse, and deformation of a tippler  building and crusherhouse used in the mining of bauxite ore. The trial  court found no coverage because the damage resulted from the defective  design of the building and was not fortuitous.   Latent Defect  Cases that provide coverage despite an exclusion for latent defects fall  generally within two categories. The court determines either that:  "the defect could have been discovered through appropriate testing and  it is therefore, not latent; or the loss resulted from a contributory covered  risk."  In Tzung v. State Farm Fire and Cas. Co., 873 F.2d 1338 (9th Cir.1989),  the court first held that damage due in part to inadequate protection  against soil expansion was excluded under a policy exclusion for \\u201cfaulty  materials or workmanship.\\u201d  Because the design and construction defects at issue in Tzung\\u2014described  as \\u201cimbedded in the ground\\u201d\\u2014were discoverable only through expert  examination of the apartment building \\u201cand the soils beneath it,\\u201d they  were not \\u201creadily discoverable.\\u201d