To treat proximate cause as if it was the cause which is proximate in time is out of the question. The cause which is really proximate is that which is proximate in terms of efficiency. That efficiency might have been preserved although other causes might meantime have sprung up, which have not yet destroyed it or really impaired it, and it may culminate in a result of which it still remains the true efficient cause to which the event could be ascribed.
With regard to pay-ability or otherwise of a claim, keeping in view the perils insured, uninsured and excepted, certain rules of proximate cause should be noted carefully.
The Rules For Application Of Proximate Cause In Insurance are as follows:
- Single Cause: When a single cause gives rise to a claim, the issue is simple. If the cause is an insured one, the claim is payable, if the cause is uninsured or excepted the claim is not payable.
- Concurrent Causes: It really becomes a difficult proposition when a loss is caused by the operation of a number of perils, some insured, some uninsured and some excepted. If no excepted peril is involved, then provided that there is at least one insured peril involved, the claim becomes payable by disregarding others. However, if excepted peril is involved with insured peril then if the effects of excepted peril can be separated from that of the insured peril then there is liability for the loss caused by the insured peril. If it cannot be so separated then there is no liability whatsoever.
- Unbroken Sequence : If excepted peril is followed by an insured peril, there is no claim. If on the other hand an insured peril is followed by an excepted peril there is claim for the loss caused by the insured peril. When several events occur in an unbroken sequence than provided there is no excepted peril involved, the whole claim is payable only if an insured peril is involved.
- Broken Sequence: If excepted peril is followed by an insured peril as a new and independent cause, here also there is liability for the loss caused by the insured peril.