We have a garage liability policy with comprehensive coverage. Our insured stated that he has water in his diesel gas tank causing engine damage. In our opinion it is excluded under the mechanical breakdown exclusion. The form is attached. May we please have your opinion?
The insured's story is that they filled his diesel truck with diesel fluid and added DEF fluid. Just to clarify, Diesel Exhaust Fluid (DEF) is a liquid used in diesel engines equipped with Selective Catalytic Reduction (SCR) systems to reduce harmful nitrogen oxide (NOx) emissions. It's a combination of urea and deionized water that is injected into the exhaust stream, where it reacts with NOx and converts it into harmless nitrogen and water vapor.
After adding the DEF fluid, the truck sat idle for two weeks. When he finally drove the truck, it stalled. The dealer then informed him that there was water in the fuel line.
Arkansas Subscriber
There are a couple possible causes of water in the fuel tank, from the fuel being contaminated from the filling station to the insured accidentally putting the DEF fluid into the gas tank and not the DEF tank; the two are separate. Either way, the mechanical breakdown exclusion wouldn't apply since the damage in this case isn't related to any actual breakdown of mechanical parts of the engine. The cause of damage was contamination of the fuel from an external source or the fuel itself, and not the breakdown of mechanical parts due to wear and tear or other causes. The loss should be covered.