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Wear And Tear Exclusion

What is 'Wear And Tear Exclusion '

A provision of an insurance contract that states that the normal, expected deterioration of the insured object will not be covered by the policy. Wear and tear is excluded from insurance policy coverage because it is inevitable. Insurance is designed to protect only against unforeseen losses. If insurance covered predictable losses, insurers would have to raise premiums dramatically to cover these expenses.

Explaining 'Wear And Tear Exclusion '

Auto insurance policies, for example, do not cover the replacement of auto parts that deteriorate with time and use, such as brake pads, timing belts and water pumps. These policies only cover unpredictable events such as collisions. To prepare for predictable losses such as wear and tear, owners can self-insure by setting aside money each month.


Further Reading


An economic analysis of fair value: A critique of international financial reporting standards
books.google.com [PDF]
… Except for the case of wear and tear or obsolescence, it … Whereas the logic of fair value is to represent a firm's wealth as an asset, the undervaluation of spe- cificity leads to the exclusion of an important part of the economic capital of the firm from the asset side of the balance …

Track wear-and-tear cost by traffic class: Functional form, zero output levels and marginal cost pricing recovery on the French rail networkTrack wear-and-tear cost by traffic class: Functional form, zero output levels and marginal cost pricing recovery on the French rail network
halshs.archives-ouvertes.fr [PDF]
… Except for the case of wear and tear or obsolescence, it … Whereas the logic of fair value is to represent a firm's wealth as an asset, the undervaluation of spe- cificity leads to the exclusion of an important part of the economic capital of the firm from the asset side of the balance …

DM NANJUNDAPPA: Road User Taxation and Road Finance in Indian Economy (Book Review)DM NANJUNDAPPA: Road User Taxation and Road Finance in Indian Economy (Book Review)
search.proquest.com [PDF]
… Except for the case of wear and tear or obsolescence, it … Whereas the logic of fair value is to represent a firm's wealth as an asset, the undervaluation of spe- cificity leads to the exclusion of an important part of the economic capital of the firm from the asset side of the balance …

Policy watch: infrastructure investment and economic growthPolicy watch: infrastructure investment and economic growth
www.aeaweb.org [PDF]
… Except for the case of wear and tear or obsolescence, it … Whereas the logic of fair value is to represent a firm's wealth as an asset, the undervaluation of spe- cificity leads to the exclusion of an important part of the economic capital of the firm from the asset side of the balance …

The socio‐economic circumstances of children at risk of disability in BritainThe socio‐economic circumstances of children at risk of disability in Britain
www.tandfonline.com [PDF]
… Except for the case of wear and tear or obsolescence, it … Whereas the logic of fair value is to represent a firm's wealth as an asset, the undervaluation of spe- cificity leads to the exclusion of an important part of the economic capital of the firm from the asset side of the balance …

Environmental stress, psychological stress and allostatic loadEnvironmental stress, psychological stress and allostatic load
www.tandfonline.com [PDF]
… Except for the case of wear and tear or obsolescence, it … Whereas the logic of fair value is to represent a firm's wealth as an asset, the undervaluation of spe- cificity leads to the exclusion of an important part of the economic capital of the firm from the asset side of the balance …


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