To the average consumer, the insurance industry comes loaded with jargon, some of seemingly unnecessary in that the terms seem to be simple common sense. But given the myriad of claim circumstances, even the apparently obvious sometimes needs definition.
An example is the term proximate cause. Proximate means ‘near’, and the term refers to the nearest cause to the accident or loss, without which the loss would not have occurred. In practical terms, what exactly does that mean?
In many cases, the proximate cause of a loss is readily apparent; Car A runs a stop sign and collides with Car B – the proximate cause of the damage to Car B being the fact the Car A ran the stop sign. But what if the stop sign had been removed by vandals? Is the proximate cause the removal of the stop sign (in which case the vandals would be liable for the damage) or is it that Car A entered an intersection when it was unsafe to do so (regardless of the lack of traffic control)? As an adjuster, I would maintain that Car A still had the last clear chance to avoid the accident, thus the latter is still the proximate cause.
There is an old example used in adjuster training that perhaps illustrates the concept even better. A man is pushed off the roof of a 30 storey building. As he is falling, he is shot through the heart by someone on the 25th floor, delivering what would have been a mortal wound. (I guess this guy had a lot of enemies). So is his murderer the person on the roof, or the gunman on the 25th floor? Is the proximate cause of his death the gunshot wound or the fall?
It may seem obvious – the gunshot was the later of the two acts, so is nearer in time to the loss – his death. But had he not been shot, would he still have died? Without a miracle or at least a truck full of pillows showing up like in the movies, the man was dead the second his feet left the roof. The gunshot did not affect the outcome one way or the other. So even though the push happened before the gunshot, the push is still the proximate cause of his death.
In insurance terms, a common example is rising water/sewer backup claims. Most basic homeowners policies do not provide coverage for flooding or rising water, but they do for sewer backup. If a river spills its banks and floods the first floor, the damage is not covered. If a clog in the sewer lines results in a backup of sewer water into the house, the damage is covered. Now, a massive sudden hail and rain storm results in so much hail that the run off grates are clogged, causing flash flooding from the rain water and sewer backup. Either way, the main floor carpet is toast. The proximate cause? The storm. Without the storm, neither flooding nor backup would have occurred.
None of the examples I have shown are completely clear cut, however, and arguments can, and are made from every side. Proximate cause, although it may seem obvious at first, in the day to day adjudication of insurance claims, can become quite complicated to sort out. The job of the adjuster is to look at the chain of events, and find the one that made all the difference – the last event without which the loss or damage would have occurred.