What happens when inherent vice is present in an insured item?

When inherent vice is present in an insured item, it refers to a situation where the item has a natural defect or characteristic that makes it prone to damage or degradation over time. This means that the item has a tendency to deteriorate or destroy itself due to its own intrinsic properties, rather than due to external causes like accidents or disasters.

For example, certain materials may be more susceptible to rust, fading, or decay, and these tendencies are often considered inherent vices. Because of this self-destructive nature, insurers typically consider items with inherent vice to be at greater risk of loss or damage, which may affect coverage terms.

In the context of insurance, understanding inherent vice is crucial, as it helps define the limits of coverage. Insurers may exclude losses or damages resulting from inherent vice from a policy because the risk is deemed to be a fundamental characteristic of the item itself rather than an external risk. Thus, recognizing that inherent vice leads to self-destruction aids in understanding why an item may not be fully insurable or may face limitations in coverage.