The Intricacies Of Concurrent Causation: Unraveling Insurance's Complexities

Concurrent causation is a legal doctrine that applies to property insurance claims where damage has been caused by two or more events, some of which may be excluded from the policy. For example, a commercial building may be damaged by both wind and flooding from heavy rain. The building is insured under a standard commercial property policy, which covers wind damage but not flooding. If the concurrent causation doctrine applies, the insurer must pay for all of the damage. The concept of concurrent causation originated in California in the 1980s, where courts ruled that insurers were liable for property losses caused by perils excluded by their policies, such as landslides and floods. In response, insurers introduced anti-concurrent causation (ACC) clauses to limit their liability. These clauses exclude damages from listed perils, even if a covered peril contributed to the damage.

Concurrent causation is a legal doctrine relevant to property insurance

For example, a commercial building is damaged by both wind and flooding from heavy rain. The building is insured under a standard commercial property policy. The loss is the result of two causes: wind (a covered peril) and flooding (an excluded peril). If the concurrent causation doctrine applies to the loss, the insurer must pay for all of the damage. Because wind is a covered peril, the damage caused by flooding is covered as well. The insurer must pay the entire loss whether one peril preceded the other or both occurred at the same time.

The concept of concurrent causation originated in California in the 1980s. Courts relied on this concept in several key rulings that forced insurers to pay property losses caused by perils such as landslide and flood that were excluded by their policies. Insurers responded to the rulings by adding anti-concurrent causation language to their policies.

An anti-concurrent causation clause is intended to eliminate coverage for any loss that's partially caused by an excluded peril. The clause is normally located in the exclusions section of a property policy. In the standard ISO policy, the exclusions are outlined in a Causes of Loss form. The Special (all-risk) Causes of Loss form contains four groups of exclusions. The anti-concurrent causation language applies to the first group, which includes the following eight perils:

• War and Military Action
• Nuclear Hazard
• Ordinance or Law
• Earth Movement
• Governmental Action
• Water
• Flood
• Mold, Fungus, or Mildew

The anti-concurrent causation clause generally applies to the types of perils that can cause catastrophic losses. However, it's important to note that not all states will apply concurrent causation. Some states determine which peril was the proximate or predominant cause of a loss, and the damage will be covered only if the proximate cause is a covered peril.

Concurrent causation may apply when two or more events have contributed to a loss

Concurrent causation is a legal doctrine that applies when two or more events have contributed to a loss, and one of them is an insured peril. The concurrent causation doctrine may apply in cases where property has been damaged by multiple causes, some of which are excluded from the insurance policy. When this doctrine is applicable, the insurer must pay for the entire loss if at least one of the causes is covered by the policy.

For example, a commercial building may be damaged by both wind and flooding from heavy rain. The building is insured under a standard commercial property policy that covers wind damage but excludes flood damage. If the concurrent causation doctrine applies, the insurer must pay for all the damage, including that caused by flooding, as wind is a covered peril. The insurer must pay the entire loss whether the perils occurred simultaneously or one after the other.

The concept of concurrent causation originated in California in the 1980s. Courts in California relied on this concept in several rulings that forced insurers to pay for property losses caused by perils such as landslides and floods, which were excluded by their policies. In response, insurers added anti-concurrent causation (ACC) clauses to their policies to limit their liability.

An anti-concurrent causation clause is intended to eliminate coverage for any loss that is partially caused by an excluded peril. It is typically found in the exclusions section of a property policy. The clause states that the insurer will not pay for any loss or damage caused directly or indirectly by an excluded event, regardless of any other contributing factors or sequence of events.

It is important to note that not all states enforce ACC clauses. Some states bar these clauses if they conflict with state-established principles, while others allow them to supersede the doctrine the state normally follows.

Many insurance policies contain anti-concurrent causation (ACC) clauses

An ACC clause is essentially an exclusion of coverage for any loss that is partially caused by an excluded peril. For example, a policy may cover wind damage but exclude flood damage. If a windstorm blows open your front door, and floodwaters leak into your home, an ACC clause would mean the insurance company is not required to pay any damages.

The wording of an ACC clause might look something like this:

> "We will not pay for loss or damage caused directly or indirectly by any of the following [excluded events]. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss."

The inclusion of ACC clauses in insurance policies is a response to the concurrent causation doctrine, which originated in California in the 1970s and 1980s. This doctrine holds that when a covered and an excluded peril combine to cause damage, the insurer is liable for the entire loss.

While ACC clauses are common, they are not enforced in all states. Some states have determined that insurers cannot contract out of the jurisdiction's public policy interest in enforcing the proximate cause rule.

ACC clauses are designed to eliminate coverage for losses partially caused by excluded perils

Concurrent causation is a legal doctrine that applies when property has been damaged by two or more causes, some of which are excluded by the insurance policy. When the doctrine is applicable, the insurer must pay the entire loss if at least one of the causes is covered by the policy.

Anti-Concurrent Causation (ACC) clauses are designed to eliminate coverage for losses partially caused by excluded perils. ACC clauses are added by insurance companies to limit their liability. They are included in the exclusions section of a property policy and typically state that the insurer will not pay for loss or damage caused directly or indirectly by any of the excluded events. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss.

For example, consider a commercial building that has been damaged by both wind and flooding from heavy rain. The building is insured under a standard commercial property policy that covers wind damage but excludes flooding. If the policy contains an ACC clause, the insurer will not be liable for the damage as an excluded peril (flooding) contributed to the damage.

The inclusion of ACC clauses in insurance policies has been a response to court rulings that insurance companies argued increased their liability and cost. These rulings applied the concurrent causation doctrine and held that if a covered hazard added to the losses from an excluded risk, the entire loss is claimable by the policyholder.

While ACC clauses are common in property and casualty policies, they are also found in liability insurance policies.

Concurrent causation arguments can be denied by insurance companies for several reasons

Concurrent causation is a legal doctrine that applies when property has been damaged by two or more causes, some of which are excluded. When the doctrine is applicable, the insurer must pay the entire loss if at least one of the causes is covered by the policy.

However, insurance companies have been known to deny concurrent causation arguments for several reasons. Here are some common reasons for denial:

• Anti-Concurrent Causation Provision: Many insurance policies today contain anti-concurrent causation (ACC) clauses that protect insurers from paying out the same claim more than once. These clauses exclude damages from listed perils, even if a covered peril contributed to the damages. If your policy has an ACC clause, your insurer may deny your concurrent causation argument and limit their liability to covered events only.
• Cause Not Covered by Policy: Insurance companies may argue that one of the causes you are claiming is not a covered peril under your policy. For example, in the case of a fire in your home leading to flooding from an automatic sprinkler system, your homeowners insurance company may accept the claim for fire damage but deny coverage for flood damage.
• No Reason Given: In some cases, insurance companies may deny your concurrent causation argument without providing a clear reason. This could be an attempt by the insurance company to save money on payouts.
• Interpretation of Policy Language: The wording of insurance policies can be complex and ambiguous. Insurance companies may interpret policy language differently than the policyholder, leading to disputes over whether a concurrent causation argument is valid.
• State-Specific Laws: The enforcement of ACC clauses and the interpretation of concurrent causation can vary depending on the state. Some states may bar ACC clauses if they conflict with state-established principles, while others allow them to supersede the doctrine the state normally follows.
• Proximate Cause Determination: In some cases, courts or insurance companies may determine the proximate or predominant cause of the loss. If the proximate cause is found to be an excluded event, the insurer may deny coverage for the entire claim, including any covered events.

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