Most larger or more complex aircraft have components with mandated retirement or overhaul limits set by the Australian Civil Aviation Safety Authority (CASA) or the manufacturer.

These Life Limited Parts (LLPs) must be overhauled or retired after a specified number of flight hours, landings, months, or a combination of these.

If an LLP is damaged due to a valid claim and requires replacement or overhaul, policies following the standard AVN1C aviation wording typically apply a pro rata adjustment to the overhaul or replacement cost.

For example, if a propeller contacts the ground in an accident, it may require repair and overhaul.

Suppose the propeller has a required overhaul interval of 3,000 hours and has already accumulated 2,400 hours before the incident — 80% of its life had been used.

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