Auto Insurance Glossary – W Definitions

War Clause

A provision in an insurance policy which excludes coverage for otherwise insured events which are caused by, or which are a consequence of, war or warlike actions. For example, the template wording produced by the Insurance Services Office for personal auto policies (which insurers in all states have adopted), has a war clause with respect to both medical payments coverage and collision and comprehensive coverage. That clause explicitly excludes coverage for bodily injury and for loss to any insured auto caused by war (whether declared or not), civil war, insurrection, rebellion or revolution. It also excludes coverage for injury or loss caused by the discharge of a nuclear weapon, even if that discharge is accidental.

Warranty

An assurance given by one party to another in a contract that representations made by the party in relation to the contract are true and materially complete, to the extent that the other party may rely on those representations. A warranty under an insurance policy can be one of two types, namely affirmative or promissory. An affirmative warranty is a representation in which the predicate is true of the subject at the time at which the representation is made (such as, “my car is principally garaged in the state of California”). A promissory warranty is a representation in which the predicate will at a future time, or will continue to be, true of the subject (such as, “I will promptly notify you of any accident or loss involving my insured auto”).

Wear and Tear

‘Wear and tear’ is not a defined term in auto policies, and consequently its meaning is that which is found in common English. See also wear and tear exclusion below.

Wear and Tear Exclusion

A provision in an insurance policy which excludes coverage for any loss caused by wear and tear. For example, auto insurance policies which provide collision or comprehensive coverage state that the insurer will not pay for any damage caused by wear and tear. The courts have interpreted wear and tear exclusions as not providing coverage for depreciation or any similar loss of functionality or value which occurs over an extended period. In particular, the courts have interpreted the exclusion clause as not providing coverage for loss which is expected to occur as a consequence of normal use, as that would be contrary to a first principle of insurance, which is to provide compensation for unexpected events.