Wear and Tear
Main rule: NMIP § 12-3, the insurer is not liable for costs incurred in renewing or repairing a part or parts of the hull, machinery or equipment which were in a defective condition as a result of wear and tear.
The exclusion of losses due to “wear and tear” (normal slitasje) is universally applied across all lines of insur-ance, the reasoning being that ordinary wear and tear is not a fortuitous event, it is a certainty, and certain events cannot be insured.
How is the clause applied in practice?
- First and foremost, if the surveyor is concerned that certain parts in connection with a casualty are damaged as a result of wear and tear, he will be asked to thoroughly document his contentions in his report. He will also be encouraged to discuss the matter with the crew and attending superintendent.
- The claims handler will bring the matter up with the assured at an early stage of the claim, in order to avoid unexpected surprises at a later stage. The assured will always be given the time and opportunity to offer his own reasons as to the cause of damage.
- If there is still disagreement after discussions have taken place, then the conditions give the parties the opportunity to appoint a technical “umpire” to give a separate opinion as to cause. The parties can fur-ther agree that such an opinion be binding.
- The claim will be adjusted on the basis of the final reports.
It is very important to remember:
- That the insurer always has the burden of proving that damage was the result of wear and tear. If there is an equal chance that it could be due to wear and tear or some other peril, the assured will prevail.
- The exclusion only applies to so-called “primary damage”. If, for example, an ordinarily worn bearing leads to extensive consequential damage to the crankshaft in the auxiliary engine, the consequential damage will still be covered.
- It is always open for the assured to claim that the wear and tear was in fact of an extraordinary nature, i.e. that it developed faster than normal or was more extensive than normal. Extraordinary wear and tear is a peril that is covered and the insurer will still have the burden of proving that only ordinary wear and tear applies.
- All service reports, maintenance reports, engine logs and running hours should be presented in cases where wear and tear may be suspected. Obviously, if service intervals have been kept and adequate maintenance applied, any wear and tear will probably not be of the ordinary kind.
One final point
The exclusion relating to wear and tear only applies to damage, it is not relevant for total loss claims or liability claims.
For further information, please contact your local claims office.
Sources: NMIP of 2013 and its Commentary
Disclaimer: These guidelines cannot be construed as a complete and binding answer to all of the possible problems and questions that can arise in connection with the topic addressed.