The Florida Supreme Court in Sebo v. American Home Assurance Co., Inc., 41 Fla. L. Weekly S582a (Fla. 2016) gave really good news to claimants seeking recovery under a first-party all-risk property insurance policy. The Court held that the concurrent cause doctrine and not the efficient proximate cause doctrine was the proper theory of recovery to apply when multiple perils—an excluded peril and a covered peril-combined to create a property loss. (The facts of this case can be located here.)
In this case, there really was not a dispute that defective construction (an excluded peril) and rain and wind (covered perils) combined to create the asserted property loss. The issue was whether the loss should be covered when both an excluded peril combines with a covered peril to cause the loss.
There are two different trigger theories to determine whether coverage applies.
The first is the efficient proximate cause doctrine which states that when there are concurrent perils that caused a loss, the peril which set the other peril in motion (the primary peril) is the peril to which the loss is attributable. So, if the primary peril is an excluded peril, there is no coverage.
The second is the concurrent cause doctrine which states that when concurrent perils cause a loss there is coverage, even when one of the perils is an excluded peril. This is a much more favorable doctrine to an insured!
Here, there was no reasonable way to determine the efficient proximate cause of the loss since the facts reveals that rain and wind combined with defective construction to cause the loss. For this reason, the Supreme Court held that concurrent cause doctrine applied meaning there was coverage even though defective construction was an excluded peril.
If you have a first-party property insurance claim, make sure to utilize the services of counsel that maximizes your ability to argue coverage under the policy.
Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.