What is the Efficient Proximate Cause Doctrine in Homeowner Property Insurance Claims?

J.P. Gonzalez-Sirgo
Founder of J.P. Gonzalez-Sirgo, P.A.

Whether a loss to your home will be covered by your insurance policy will depend, among other things, on the language of your policy and the cause of your loss. The language of your policy needs to be reviewed to determine what perils will be covered and which are not. But also, the language of your policy is important because it will determine which rules of law will apply to your case. Depending on the language, your claim may be subject to either the concurrent cause (CC) doctrine or the efficient proximate cause (EPC) doctrine. Depending on the facts of your case, whether your claim is subject to the CC rule or the EPC rule may be determinative as to whether you will be entitled to recover or not.

What is the Difference between the EPC Doctrine and the CC Doctrine?

With respect to homeowner’s property insurance claims, the CC doctrine states that when two independent perils, one covered and the other excluded, combine to produce one loss to your home the insured will still be entitled to recover if the covered peril directly caused some of the damage. By way of example, think about a situation in which your home is constructed with faulty materials. Furthermore, your policy contains language excluding such faulty materials, but it contains language covering you for water and wind damage. After a strong storm, your home becomes damaged. The damage is so extensive that your home is deemed a total loss. The cause of your loss is determined to have been a mixture of both of these perils, defective materials in the construction of your home and the wind/rain damage, but neither can be said to have been the main force behind the loss. In this situation, the CC rule would allow the homeowner to recover for her loss, despite the fact that some of the damage was caused by a covered peril and some of the damage was caused by a non-covered peril. It is generally regarded that this rule is more insured-friendly because it lessens the burden of proof on the issue of causation.

On the other hand, the EPC doctrine takes a different view. This rule states that recovery will only be allowed if the covered cause is the efficient proximate cause of the damage. In other words, the covered cause must have been the primary cause, or the driving force, that produced the loss to your home. Typically, this means that the causes are dependent on one another such that the initial cause (the EPC) caused the occurrence of the additional or dependent causes. In essence, this creates a burden on the insured to produce sufficient evidence to establish that it was the covered peril that was the most responsible force that produced the result, even if other causes somewhat contributed to the damage. In our example above, if the EPC rule were applicable then the insured would have to demonstrate that the wind and the rain damage was the primary and most substantial force behind the damage, even if the defective materials contributed somewhat. You can see how this would be difficult to demonstrate. Because a loss under this rule is not covered if it is only a remote cause or if the EPC were an excluded loss, the insurer would likely have a strong argument that it was the defective materials that were primarily responsible cause of the loss, thus preventing the homeowner from recovering. Clearly, this level of proof is more difficult to demonstrate making the homeowner less likely to recover in these situations.

When will EPC or CCD apply?

As mentioned, whether the EPC or CC rule will apply is a matter of contract interpretation. A review of your policy is necessary to determine which set of rules will apply in your jurisdiction. Typically, when the language of your policy is silent, courts will generally apply the CC rule. However, often homeowner’s insurance policies will contain provisions indicating that the EPC rule will apply. These provisions are a favorite amongst insurers, so don’t be surprised to find one in your policy. Until recently, there were splits in the different jurisdictions as to when these different rules will apply. However, a recent Florida Supreme Court decision has made clear that the CC is the standard that will be applied in homeowner’s insurance cases unless the policy clearly and unambiguously states otherwise. Although the general standard is that the CC rule will apply, an anti-concurrent clause has the effect of negating this rule. Anti-concurrent clauses state that when covered causes and non-covered cause combine to produce one loss which would not have occurred absent either of the two causes, then all of the causes associated directly or indirectly with the loss will be excluded.

Question of Facts & Questions of Law

As a rule of thumb, questions of fact are left for the fact finder (e.g. the jury) while questions of law are decided by the judge. Thus, whether the insured has met their burden under either the EPC or the CCD rule is typically decided by the jury. On the other hand, the question of which of the two rules will apply is a question of law that must be decided by the judge. However, in some circumstances the question of whether the covered loss was the EPC of the damage may not even reach the jury. If the insured cannot produce sufficient evidence that the covered peril was the EPC of the loss, the judge may decide the case on motion by the insurance company. These cases are tricky, and often require specialized experts to evaluate the extent of each of the causes that contributed to the loss. Moreover, because of the complexity of these cases it is recommended that you obtain an experienced insurance claims attorney to assist you through the process.

You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].