1. Proximate Cause.

Last week a friendly client phoned to say that his Range Rover had been stolen. He didn’t have Theft coverage on his car. “Tough luck,” I told him. A few hours later he called back. The car had been found! But the thief had crashed it. And my client DID have Collision coverage on the vehicle. “Tough luck, “ he told me, “I am going to claim for the repair of the damage to the car caused by the thief.” I don’t like to be a wet blanket, but I had to explain what proximate cause is.

Insurance companies, for claims, look at exactly what caused the event leading to a loss. In the case of my friend, it was the theft of the car. It was the thief who wrecked it. Theft was the PROXIMATE CAUSE. My client didn’t have coverage for Theft, so the insurance company would not honor a claim. “Tough luck.”

The proximate cause concept can work against you, as in the case I mentioned, but it can also work in your favor.

Examples:

Most people do not carry Fire coverage on their Auto insurance policies. But if a car were to catch fire as a result of a collision, if the car’s Auto policy included Collision coverage, the insurance company would pay because collision was the proximate cause.

If a seaside house covered for earthquakes but not for floods were to be demolished by a tsunami, the insurance would pay. Tsunamis are caused by earthquakes, so the proximate cause of the flood caused by the tsunami was the earthquake.

A house catches fire. The firemen break down the door in order to get their hoses in. The proximate cause of the broken door was the fire, so the Fire policy will pay for its repair even if it wasn’t precisely the fire that damaged it.

2. Theft vs Vandalism.

Sometimes I have had calls from clients to report vandals have broken into their houses and stolen a bunch of stuff. Whoa! Thieves are thieves and vandals are vandals, and never the twain shall meet! Out comes my jolly old Webster´s Dictionary. Quote: “THIEF: One that steals, especially secretly.” “VANDAL: One who willfully or ignorantly mars or destroys property belonging to another or to the public.” So a thief is the guy that breaks into your house on Friday night when you are at the pictures, and takes away your TV, your VCR and the family jewels. And a vandal is the lovely person who, because of some slight insanity, derives morbid pleasure from putting a stone through your plate glass living room window, blowing up your mailbox, or caressing the paint on the fender of your shiny new car with a key.

In regard to insurance on houses, it is important to make this distinction between theft and vandalism. Coverage for vandalism comes as part of the Fire & Natural Disaster policy (in Spanish, “Hogar Seguro 2000”), whereas for Theft coverage you need a special policy, known in Spanish as “Robo Domiciliario.”