Loss and Causes of Loss Flashcards
A condition that increases the likely number of losses or the likely severity of a loss. ie: insufficient light in high crime area or potholes on busy highway.
Hazard
A cause of loss. ie: fire, explosion, windstorm, flood, theft, collision.
Peril
The cause that sets in motion an unbroken chain of events leading to the loss. May or may not be the immediate cause of the loss. ie: earthquake breaks gas main > fire > destroys bldg. The earthquake is this to the building.
Proximate cause of loss
A policy that uses a list of or description of the perils that are covered, or “specified perils”. Burden of proof rests on insured to prove item was dmgd by one of the listed perils.
Named Peril
Theft, burglary, robbery or “mysterious disappearance”
Crime Peril
A theft or attempted theft when property is NOT occupied. ie: a break in while insured is on vacation
Burglary
A theft while property is occupied with force. ie: “hold up”
Robbery
Covered property disappeared from a known place and was probably stolen.
Mysterious Disappearance
A loss to covered property by any cause is covered UNLESS the insurer can prove that the loss was caused by a peril on the excluded list. Sometimes referred to as “special”
Open Perils
Typically excluded perils
war/military action, nuclear hazard, earth movement, flood, wear and tear and employee dishonesty.
A property insurance policy that is purchased addition to a commercial property policy to obtain coverage for perils such as flood and earthquake that commercial policy does not cover. Fills coverage gaps.
Difference in Conditions policy (DIC)
In litigation courts follow this. If a given loss involves more than one peril, and at least one of the perils is covered by the policy, then the loss is covered - even if the policy specifically excludes another cause of loss.
Concurrent Causes of Loss
