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
  • obsolescence
  • non-serviceability
  • 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.