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We performed a time-stepping finite-element-method (FEM) analysis to study a rotor surface-mounted permanent-magnet synchronous machine with insulation failure inter-turn fault. We used FEM for magnetic field study and determining the machine parameters under various fault conditions. We studied the effect of machine pole number and number of faulted turns on machine parameters. Finally, we used the FEM machine model for studying permanent-magnet machine behavior under different fault conditions.