When a major storm comes into the area, the resulting property damage seldom relates to a single, easily-identifiable cause. But when all causes are covered under a property insurance policy, carriers should be able to settle claims relatively easily.
Still, our Fort Lauderdale property damage lawyers are typically called in when insurers deny claims for damage caused simultaneously, or in succession, by covered and non-covered perils.
How Coverage is Determined When Multiple Causes Apply
Deciding whether to pay or deny a claim for multiple perils can be highly subjective. As a general rule, insurance companies look at three basic factors when making this decision:
- Policy coverage: First, insurers look at the policy language to determine if any or all of the potential multiple causes are covered. If all claimed causes are excluded, the claim is routinely denied. If only one cause is covered, the analysis continues to decide whether to settle or deny the claim.
- Concurrent causation: This legal doctrine essentially allows coverage for damages caused by multiple causes, even if some of those causes are excluded from coverage or not covered by the policy. However, policies may include anti-concurrent causation language, which specifically denies coverage when excluded named perils cause damage in conjunction with a covered peril. This is why an analysis of your particular policy language is critical.
- Efficient Proximate cause: Florida’s Supreme Court is right now considering whether courts are to apply an “efficient proximate cause” theory to losses in place of the concurrent causation doctrine. The efficient proximate cause theory basically states that if the efficient proximate cause of the loss is a covered peril then the losses are covered. If it is an excluded peril, the losses are not covered.
Prior Court Cases Often Determine new Decisions
Making the decision to choose proximate cause instead of concurrent causation is not easy for the courts which often rely on prior cases to establish precedents for new case decisions. This is what the Second District Court of Appeal of Florida did in the case of American Home Assurance Co., Inc. v. John Robert Sebo. This is the case referenced above that is currently before the Supreme Court.
In this case, a homeowner filed a claim against his all-risk policy for home damage after Hurricane Wilma. The insurance company denied all damages except for mold damage because of well-documented prior damages related to poor design and construction. In fact, he had already settled other claims filed against the architect, sellers and construction company.
Although the claimant won his insurance case in circuit court based on concurrent causation, the insurance company appealed that decision on the basis of proximate cause.
The appeals court decision looked carefully at prior cases that were mixed between relying on concurrent causation and proximate cause. In the end, they chose proximate cause and reversed the original decision.
Claim Denials Require Experienced Legal Support
Every property insurance claim is unique, so it makes sense to discuss claim denials with a Florida property damage attorney who can accurately predict the likelihood of turning a denial into a full or partial settlement.