Insurance Terminology Proximate Cause
Words terms or phrases that are described in an.
Insurance terminology proximate cause. Therefore it is a highly relevant principle in the insurance industry. Proximate cause active direct and efficient cause of loss in insurance that sets in motion an unbroken chain of events which bring about damage destruction or injury without the intervention of a. This is where the doctrine of proximate cause helps. An insurance policy that pays only after primary coverage has been exhausted is said to be excess c.
8 1 proximate cause definition proximate cause was defined in the. This section provides a definition of proximate cause and explains how it should be determined in practice. Proximate cause is a legal limitation on cause in fact. For an act or event to be considered a proximate cause it does not necessarily have to directly precede a loss or begin a chain of occurrences leading to the same.
If the cause of loss peril is insured the insurer will pay otherwise the insurer will not compensate. Read on to discover the definition meaning of the term proximate cause to help you better understand the language used in insurance policies. Proximate cause is a key principle of insurance and is concerned with how the loss or damage actually occurred and whether it is indeed as a result of an insured peril. The proximate cause itself may not do any direct damage.
Proximate cause is a key principle of insurance and is concerned with how the loss or damage actually occurred. The efficient or effective cause which causes the loss is called proximate cause it is the actual cause of loss. Proximate cause in life insurance. Proximate cause refers to the first event or first peril in a series of events that cause damage in an insurance claim.
Proximate cause is a secondary cause of loss. For an act to be deemed to cause a harm both tests must be met. Courts employ a set of proximate cause rules to resolve causation disputes when a property policy states that it covers or excludes losses caused by a. There are several competing theories of proximate cause see other factors.
All of the following statements regarding property insurance terminology are true except. Proximate cause refers to a direct cause of loss without which the loss would not occur. Proximate cause or the latin causa proxima relates to the cause of the loss in that the event of the peril insured against must be covered under the insurance contract policy and the dominant cause of the event must not be excluded. Giving up the proprietary rights in insured property to the underwriter in exchange for payment of a constructive total loss.
The insurance policy may cover the proximate cause but not the event that actually causes the damage so the policy holder will not be reimbursed for his claim.
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