Deciphering Coverage: The Role of Concurrent Causation and Anti-Concurrent Causation Clauses in North Carolina Property Insurance Claims

Concurrent causation is a pivotal concept in understanding how to make proper property insurance claim coverage determinations under North Carolina law. This concept is crucial when evaluating insurance claims where multiple causes contribute to a loss. Some of these causes might be covered under an insurance policy, while others may not. Understanding how concurrent causation is treated under a jurisdiction’s law can significantly impact the coverage of a property insurance claim. Moreover, the inclusion of an anti-concurrent causation clause in an insurance policy adds another layer of complexity. This blog post explores the concept of concurrent causation, its application under North Carolina law, and the significant impact of anti-concurrent causation clauses on property insurance claims in this State.

Understanding Concurrent Causation

In North Carolina, when a loss has more than one cause, one of which is covered by an insurance policy and the other which is not, the insurer must provide coverage. This is known as the principle of “concurrent causation” Builders Mut. Ins. Co. v. Glascarr Props., 202 N.C. App. 323.

As a general rule, coverage will extend when damage results from more than one cause even though one of the causes is specifically excluded. But if an excluded source of loss is the sole cause of the loss then the policy does not provide coverage. Builders Mut. Ins. Co. v. North Main Constr., Ltd., 361 N.C. 85.

North Carolina’s principal of “concurrent causation” is distinct and different from the law of many other jurisdictions, including the efficient proximate cause rule from some neighboring states, where coverage is only provided for the primary cause of loss that set the other causes in motion.  Many adjusters, particularly those coming to adjust losses here from neighboring states, do not understand the concept of “concurrent causation” as it exist under North Carolina law.

The Impact of Anti-Concurrent Causation Clauses

To manage the complexities and uncertainties surrounding concurrent causation, many insurers include anti-concurrent causation clauses in their policies. These clauses explicitly state that if a loss is caused by a combination of covered and excluded risks, the entire loss will be excluded from coverage. The presence of such a clause significantly impacts the coverage determination for a property insurance claim.

Under North Carolina law, the enforceability and interpretation of anti-concurrent causation clauses have been subjects of legal scrutiny. Courts have examined the clarity and explicitness of the policy language, ensuring that policyholders have a clear understanding of their coverage limits. These clauses have been upheld in numerous cases, provided they are clearly worded and unambiguous, emphasizing the importance of policyholders thoroughly understanding their insurance contracts. See Builders Mut. Ins. Co. v. Glascarr Props., 202 N.C. App. 323.

In short, these clauses generally exclude coverage for certain losses, regardless of whether the loss arises from more than one cause or sequence of events. Builders Mut. Ins. Co. v. Glascarr Props., 202 N.C. App. 323. This means generally that if one of the causes of the damage is specifically excluded in the policy, the insurer is not obligated to provide coverage for the damage, even if there are other causes that are covered by the policy.

In essence, “anti-concurrent causation” clauses can serve to limit the insurer’s liability in cases where the damage is caused by multiple events, even if only one of which is excluded in the policy. Builders Mut. Ins. Co. v. North Main Constr., Ltd., 361 N.C. 85.

Practical Implications

For policyholders in North Carolina, the presence of an anti-concurrent causation clause necessitates a careful review of their insurance policies. Understanding the specific perils covered and the implications of such clauses on their coverage is crucial. In the event of a loss involving multiple causes, policyholders should prepare for a thorough investigation by their insurer and possibly seek legal advice to navigate the complexities of their claim.

For insurers, accurately drafting and communicating the details of anti-concurrent causation clauses is essential to avoid legal disputes and ensure clear coverage boundaries. Transparency with policyholders about how these clauses affect their coverage can aid in managing expectations and mitigating conflicts.

Conclusion

The concept of concurrent causation and the impact of anti-concurrent causation clauses are critical components of property insurance law in North Carolina. These elements determine the scope of coverage in complex scenarios involving multiple causes of loss. Both policyholders and insurers must pay meticulous attention to the details of their insurance policies and the potential legal interpretations of these clauses. As the landscape of property insurance continues to evolve, staying informed about these key concepts will be vital for navigating coverage determinations and disputes effectively in this State.