In 2025, consumers have a ton of choices when shopping for new appliances. From refrigerators to washing machines, homeowners can select basic models to bespoke, designer options with all the bells and whistles. And with all of these choices come some benefits! Increased energy efficiency and enhanced features make today's modern appliances more appealing than their 20th century counterparts. However, a less than ideal feature of modern appliance design, planned obsolescence, has homeowners paying the price for all this innovation.
The rise of planned obsolescence—the practice of designing products with a limited useful life to encourage frequent replacements—has added complexity to appliance insurance claims. When an appliance breaks down, how do you differentiate between wear and tear and covered damage? Understanding this distinction is key to evaluating claims accurately and fairly.
What Is Planned Obsolescence?
Planned obsolescence is a manufacturing strategy where products are intentionally designed to have a shorter lifespan. This may involve:
Limited Durability: Using lower-quality materials that degrade faster.
Software Updates: Releasing updates that reduce functionality in older models.
Design Constraints: Making repairs difficult or costly by using proprietary parts or sealed components.
For adjusters, planned obsolescence can complicate claims evaluations, as the shortened lifespan of appliances may blur the line between normal wear and tear and unexpected damage.
Defining Wear and Tear
Wear and tear refers to the gradual deterioration of an appliance due to regular use and aging. Common indicators include:
Mechanical Failures: Motors, belts, or compressors wearing out over time.
Cosmetic Damage: Scratches, discoloration, or minor dents.
Performance Decline: Reduced efficiency or slower operation.
Insurance policies typically exclude wear and tear from coverage, as it is considered part of the natural aging process of an appliance.
What Constitutes Covered Damage?
Covered damage, on the other hand, typically involves sudden and accidental events that impair an appliance’s functionality. Examples include:
Electrical Surges: Damage caused by power spikes.
Water Damage: Leaks or flooding that affect internal components.
Accidents: Dropping an appliance or damaging it during a move.
Understanding the cause of damage is essential for determining whether it falls within the scope of coverage. Retaining a third party expert like Zap Consulting will ensure adjusters receive the most accurate information regarding the cause of loss, extent of damage, repair vs replacement determination, and ACV and RCV recommended payout amounts.
Evaluating Appliance Claims: Key Considerations
To differentiate wear and tear from covered damage, consider the following steps:
1. Review the Policy Language
Start by examining the specific terms of the insurance policy. Policies often contain exclusions for wear and tear, mechanical breakdown, or damage resulting from neglect. Clear documentation of what is covered will guide your evaluation.
2. Inspect the Appliance
A thorough inspection by an unbiased third party like Zap Consulting can provide valuable insights into the nature of the damage. Experts look for:
Signs of gradual deterioration, like worn-out parts or corrosion.
Evidence of a specific event, such as burn marks from an electrical surge or water stains.
3. Gather Contextual Evidence
Ask the policyholder about the appliance’s history. Questions to consider include:
How old is the appliance?
Was it experiencing issues before the damage occurred?
Were there any recent incidents, like power outages or water leaks?
The Role of Planned Obsolescence in Claims
The concept of planned obsolescence adds a layer of difficulty to appliance claims. For example, if a five-year-old refrigerator fails due to a poorly designed compressor, is that wear and tear or an unexpected defect? While manufacturers’ warranties may address some issues, insurance policies generally do not cover manufacturer-intended limitations.
Adjusters must balance the realities of modern appliance design with the terms of the policy. When in doubt, focus on:
Documenting Evidence: Maintain detailed records of inspections and assessments.
Fairness and Transparency: Ensure policyholders understand the reasoning behind decisions.
Continuous Learning: Stay informed about trends in appliance manufacturing and common issues.
Get an Expert Opinion: To ensure you have the most accurate information about the appliance claim, including the cause of loss and extent of damage, consider experts like Zap Consulting.
Determining wear and tear versus covered damage in appliance claims requires a methodical approach. While planned obsolescence complicates matters, a thorough understanding of policy language, appliance inspection, and the context of damage can lead to accurate evaluations. As appliances evolve, adjusters must adapt their practices to ensure fair and consistent claim resolutions. By staying vigilant, you can navigate this challenging aspect of property damage adjusting with confidence.