Most open peril property policies (sometimes called “all-risk,” although that is a misnomer) contain a basic grant of coverage providing that they cover all risks of direct physical loss or damage to covered property that are caused by or resulting from a covered cause of loss unless the cause of loss is excluded. When a loss results from a combination of separate causes, some of which are covered, and others of which are not covered, absent anti-concurrent causation language, which is addressed in the anti-concurrent causation summary, a causation analysis may be necessary.
There are two main approaches to a determination of whether a loss resulting from multiple distinct, separate causes is covered or excluded. The majority of jurisdictions use the “efficient proximate cause” rule, the application of which varies somewhat from jurisdiction to jurisdiction. See, e.g., Garvey v. State Farm Fire & Casualty Co., 48 Cal. 3d 395 (1989). Typically, though, in analyzing whether coverage exists, the court will look to the chain of causation to determine what the “predominant” cause of the loss is. If the “predominant” or “efficient proximate cause” is excluded, then the loss is not covered. Conversely, if the predominant cause is covered, then the loss is covered. Some other courts applying an “efficient proximate cause” standard may focus on the first or last cause in the chain of events.
A minority of jurisdictions apply the “concurrent causation” approach, which in its most basic form provides that if there are multiple distinct, separate causes, some of which are covered and some of which are excluded, and one covered cause contributed in more than a remote way to the loss, then the loss is covered. Under this approach, it is not necessary to determine which cause was first in the chain of causation, nor is it necessary to determine which cause was the most significant cause. Rather, the typical analysis of concurrent causation uses the “but for” test: if the loss would not have occurred but for a covered cause of loss, the loss is covered. See, e.g., Spece v. Erie Ins. Group, 850 A.2d 679 (Pa. Super. 2004).
In a recent decision arising out of Superstorm Sandy, the United States District Court for the District of New Jersey confirmed the enforceability of anti-concurrent causation provisions. Zero Barnegat Bay, LLC v. Lexington Ins. Co., No. 14-cv-1716, 2019 U.S. Dist. LEXIS 43625 (D.N.J. Mar. 18, 2019). In Barnegat Bay, the insured sought coverage for damages … Continue Reading
We have discussed on a number of occasions the issue of causation when there are multiple causes of loss, some covered and some not covered. Most jurisdictions apply what is known as the efficient proximate cause analysis with a minority of jurisdictions applying the concurrent causation analysis, both of which are explained on our blog … Continue Reading
As we have written about before on this blog, the water damage caused by Hurricane Sandy in October 2012 gave rise to important questions concerning the applicability of so-called “anti-concurrent causation” clauses. Such was the case in the recently-decided matter of Carevel, LLC v. Aspen American Ins. Co., 2016 U.S. Dist. LEXIS 157919 (D.N.J. Nov. … Continue Reading
In Johnson v. Omega Ins. Co., 2016 Fla. LEXIS 2148 (Sept. 29, 2016), the Florida Supreme Court determined that the 5th DCA misapplied and misinterpreted two statutes, the first providing a presumption of correctness to the initial report of an engineer retained by an insurer to investigate a sinkhole claim, and the second providing for … Continue Reading
Significant attention has been given in the media to the New York Assembly’s recent passage of several bills, apparently motivated by Storm Sandy, that would impact property insurance claim handling and litigation. None of these bills have been passed by the state senate yet, or signed by the governor. Some of them have been inaccurately described in … Continue Reading
As reported by Arthur D. Postal on PropertyCasualty360.com’s online news service, Congress’s recent extension of the National Flood Insurance Program includes a potentially significant provision intended to help resolve debates about allocation of damage between wind and water in hurricane losses. Recently, Congress passed the Consumer Option for an Alternative System to Allocate Losses (“COASTAL … Continue Reading