Chapter 6 - Proximate Cause

Question 1

What will an Insurer ask itself when deciding to meet a claim?

Answer 1

1. Is the insurance contract in force?
2. Was the loss caused by an insured peril?

If can’t be answered will look at claim form or policy records

Question 2

Define proximate cause

Answer 2

Means the active, efficient cause which sets in motion a train of events which bring a bout a result, without the intervention of any force started and working actively from a new or independent source.

Question 3

Explain proximate cause

Answer 3

Proximate cause of an occurrence is the dominant cause = direct link between it and a loss.

Question 4

Explain the domino analogy to explain proximate cause

Answer 4

1st domino = proximate cause
last domino = loss

But if dominos stop and then pusher over by an onlooker - then this is a new proximate cause of the loss (so doesn’t always have to be first)

Question 5

What 3 things can perils be classified as and what does this determine?

Answer 5

1. Expected/excluded - named but not specifically covered
2. Uninsured/unnamed - no mention in the policy at all
3. Insured - named in the policy as covered

Depends which category the proximate cause is in for how the Insurer will respond to the claim

Question 6

What two things are considered when deciding if a loss is covered?

Answer 6

1. Which perils are clearly stated as covered by the policy?
2. Which perils are clearly NOT covered by the policy (the excepted perils)?

Question 7

How can a doctrine of proximate cause be modified?

Answer 7

Through the policy wording - so important to check precise wordings of exclusions in deciding how they impact a claim

Question 8

When identifying a proximate cause…

Answer 8

There is a direct link between the proximate cause & resulting loss

Question 9

The principle of proximate cause is applied when….

Answer 9

More than a single cause