Exclusions in Coverage
The State excludes from coverage any University property loss arising from the following (Statutory Exclusions of Coverages and Arizona Revised Statutes §41-622.B):
- employee infidelity
- inventory shortages
- mysterious disappearance
- normal wear and tear
- mechanical or electrical breakdown
- University property losses less than $100 in value
- nuclear reaction or radiation
- warlike action
- other common exclusions
Exclusions in coverage pertain to the following State-owned property: roads, bridges, tunnels, dams, dikes, and retaining walls, Arizona Administrative Code R2-10-106.
A common coverage question arises when there is an apparent theft without forced entry. Coverage under the rule is applicable if the facts support a reasonable presumption of theft. The key factors in making this determination are definite knowledge of property in a specific location and a relatively short time lapse for the property to be discovered missing. Without reasonable presumption of theft, the State adjuster will classify missing property as a mysterious disappearance and deny the claim. To qualify for insurance settlement for theft or burglary of NAU-owned personal property, the University must show evidence of forcible entry, that a threat of violence was used in the taking of the property, or there must a reasonable presumption of theft (A.R.S. §41-622.C).
For more information on Exclusions in Coverage, contact the Insurance Officer with Property and Liability Insurance Services, at (928) 523-2009.