CMFAS BCP Principles of Insurance question: PROXIMATE cause of a loss

CMFAS BCPPrinciples of Insurance

If the PROXIMATE cause of a loss is an EXCLUDED peril, the insurer will:

A Not be liable, because the dominant cause of the loss is excluded
B Pay in full, as long as the sum insured is adequate
C Pay half the claim
D Pay only if an insured peril occurred earlier in time than the excluded one

Show the answer and explanation

Answer: A. Not be liable, because the dominant cause of the loss is excluded

Cover responds according to the proximate cause. If the dominant, efficient cause is an excluded peril, the loss falls outside the policy and the insurer is not liable — even if some insured peril featured elsewhere in the sequence.

Common mistake

It is the PROXIMATE cause that decides cover — an excluded proximate cause defeats the claim even if an insured peril appears in the chain.

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CMFAS BCP Principles of Insurance question: PROXIMATE cause of a loss

Answer: A. Not be liable, because the dominant cause of the loss is excluded

Common mistake

Related CMFAS BCP questions

CMFAS BCP Principles of Insurance question: PROXIMATE cause of a loss

Answer: A. Not be liable, because the dominant cause of the loss is excluded

Common mistake

Related CMFAS BCP questions