BY DIANA REITZ
Oh, the ironies of insurance and isposable-diaper material. An FC&S Online subscriber recently contacted
us about a claim in which a truckload
of the absorbent material used to make
disposable diapers was ruined by, of all
things, “wetness.” the very thing the
material was meant to absorb became its
demise in this situation, and the insurance
carrier denied the claim.
the reason for the denial? the Motor
truck Cargo Legal Liability coverage
form excluded loss arising from a series
of causes—such as spoilage, changes
in texture, extremes in temperature,
“wetness, dampness, dryness, corrosion
or rust”—unless the loss resulted from
specific causes. the causes that would
trigger coverage for such things as wetness
included fire, lightning, wind or hail.
Water damage was not listed.
the advocate for coverage reasoned that
the cause of loss was water damage and
not wetness. After all, the roof of the truck
leaked, letting water in, and that was what
ruined the material.
since water damage was not mentioned
and wetness was not defined on the policy,
we turned to Merriam-Webster online.
it defines “wet” as, among other things,
“consisting of, containing, covered with
or soaked with liquid (as water).” on
the surface this definition appears to
encompass water damage—but does it, in
the context of insurance coverage?
The very thing the material was
meant to absorb became its
demise in this situation, and the
insurance carrier denied the claim.
Among the most complicated of issues
in P&C insurance coverage are the theories
of concurrent causation and efficient
proximate cause. Concurrent causation
finds coverage for a loss that is caused by
two or more events, at least one of which
is covered on the policy.
As a result of litigation in the 1980s,
most insurance companies added anti-concurrent causation language to their
policies. this language states that the loss
causes that follow the language are not
covered regardless of whether any covered
cause or event contributed concurrently
or in any sequence to the loss.
the Motor truck Cargo form in
question did not preface its exclusion for
damage caused by wetness with such anti-concurrent causation language.
the efficient proximate cause rule
allows for insurance recovery for a loss that
is caused by a combination of a covered
risk (arguably, in this case, water damage)
and an excluded risk (wetness) only if the
covered risk was the efficient proximate
cause of the loss. this means that the
covered risk set a series of events in motion
which, in an unbroken sequence, caused
Jurisdictions vary as to whether they
follow the efficient proximate cause rule
or not. But since this form does not preface
the exclusionary language for wetness
with anti-concurrent causation language,
i’m inclined to back the advocate for
coverage. i think the efficient proximate
cause theory applies: Water damage
(covered) led to wetness (excluded) in an
unbroken sequence. NU
Diana Reitz, CPCU, is
editorial director for the
reference division of The
National Underwriter Co.,
which includes FC&S Online.
She may be reached at
California Residents Ignited Over Wildfire Maps
BY ROBERT REGIS HYLE
After Writing recently about the predictive modeling now being done by Pitney Bowes software and
Anchor Point group for the emerging risk
of wildfires in this country, i was amused
to see the following headline in the Orange
County Register: “residents worry new fire
maps mean higher insurance rates.”
California law requires fire officials
to periodically update fire-hazard maps,
according to the Register, using the latest
data, science and technology.
on top of a big hill is more at risk than my
neighbors halfway up the hill.
But i learned one important fact about
having homeowners’ insurance 22 years
ago when a tornado struck my home:
i can never replace what my insurance
carrier did for me when my house was
destroyed. trust me, my homeowners’
premiums have been a bargain, even 22
years later. NU
Robert Regis Hyle is
Editor in Chief of Tech
Decisions magazine and
Technology Channel Editor
com. He may be reached
March 12, 2012 | National Underwriter Property & Casualty | 25