Concurrent Causation

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DEFINITION of 'Concurrent Causation'

An insurance theory stating that if loss or damages occur as a result of more than one cause, one of which is covered (insured) while the other is not, the damages are likely to still be compensated for by the insurer.

This theory has been a frequent source of debate and reinterpretation in courts across the U.S. and Canada; insurers have tried to insert concurrent causation clauses into contracts (especially in property/casualty insurance) to protect against certain perils even if they are involved in concurrent causation.

BREAKING DOWN 'Concurrent Causation'

The interpretation of concurrent causation seems to be revisited whenever there is a major disaster, such as with Hurricane Katrina. Insurance policies often had provisions preventing payouts in the event of flooding, but there was protection against faulty levees and city maintenance of them.

California has also been the source of much court precedent in this matter, as the state has more than its fair share of mudslides, earthquakes, wildfires and other natural disasters.



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