06 LJ NP231 Transfer case Rusted?

[RubiKat]

I have a friend with an 06 LJ that has 70K miles and the transfer case went out. When he tried to get the insurance company to pay for it he was told it is not covered because there is rust in the t-case that caused the failure. Has anyone else heard of rust in the T-case? Is this a common issue? He is a sand crawler and not water or rocks so this does not make a lot of sense.

Any help would be appreciated to make a case to get either the insurance company or Jeep to help with the $2500 repair bill.

Thanks,
Katherin

[Dukes69]

Is it possible in those 70k miles that some water got in there? Either way a low miles t-case can be had for a $500 +/-, hardly worth the hassle with the insurance co.

[OldDocDoyle]

Solution?

Kat,
My wife made me pony up for an extended bumper-to-bumper mechanical warranty for my '06 LJ two years ago. $151/month is alot of do-re-mi for three years. Foretunately, it's already more than two years done with now and my new transfer case tmrw is only costing my $50! And mine only had 65k on it! Just spoke to my service mgr who is a buddy of mine and he said he's sure that that is the problem.
ODD