Mechanical Breakdown and Wear and Tear Exclusion—Not Applicable

We insure a commercial building and its business personal property on the commercial property form (CP 00 10 04 02) with “special” causes of loss (CP 10 30 04 02). The building's roof is failing as a result of old age.

Recently, rainwater came into the building through the roof. It did substantial damage to both the interior of the building and the contents. The insurer has denied all claims, citing the exclusion of “wear and tear.” We agree that no coverage exists for the roof. However, we believe the subsequent water damage to the interior and the contents should be covered.

May we have your opinion?

Minnesota Subscriber

The adjuster was correct in denying this claim. However, he was wrong to cite the exclusion of “wear and tear.”

The damage to the interior and the contents was from rain—not from wear and tear. However, the loss is still not covered, by virtue of the “Limitations” contained in section C of the CP 10 30. That section of the CP 10 30 denies payment for damage to a building's interior or its contents caused by “rain, snow, sleet, ice, sand, or dust.” It gives back coverage for such damage only if the “rain, snow, etc.” enters the building through an opening caused by a covered cause of loss. For instance, there would be no coverage if the insured simply left a window open and rain got in damaged the building and contents. However, if a windstorm tore a hole in the roof and rainwater got in, then the water damage would be covered.

In this instance, the “opening” in the roof was caused by wear and tear. Since that is not a covered cause of loss, the resultant damage from the rain is not covered.