Evaluating First-Party Property Claims with Multiple Causes Under the Efficient Proximate Cause Doctrine

Evaluating First-Party Property Claims with Multiple Causes Under the Efficient Proximate Cause Doctrine

Susan Field and Rina Carmel   By Susan J. Field and Rina Carmel, Attorneys, Musick, Peeler & Garrett LLP

In "Evaluating First-Party Property Claims with Multiple Causes Under the Efficient Proximate Cause Doctrine," appearing in the November/December 2011 issue of Coverage, Susan J. Field and Rina Carmel of Musick, Peeler & Garrett LLP in Los Angeles initially note that for a claim to be covered by first-party property insurance, the loss must be caused by a covered loss or peril. There may well be more than one cause of loss. Where one cause of loss is covered by the policy, but another cause is either not covered under the insuring agreement or is an excluded cause, the analysis to determine whether coverage exists can be complicated. This article surveys the various approaches states have adopted to determine coverage in such situations. These include application of the efficient proximate cause doctrine (the majority approach), application of the independent concurrent cause rule (the minority approach), and enforcement of a policy's "anti-concurrent causation" language (a more recent approach). The article then analyzes the statutes and case law addressing the meaning and application of the efficient proximate cause doctrine. For instance, in a claim involving multiple causes of loss, the factual investigation first must determine what perils occurred and how many perils occurred. The article discusses court decisions providing guidance on analyzing such issues. The article further provides some practical recommendations for both insurers and policyholders when working with consultants to investigate claims with multiple causes of losses. It concludes that "[a]n understanding of the policy language, governing law, and facts of the claim (with the assistance of consultants, if appropriate) can assist both parties in an appropriate evaluation of coverage."  

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