Concurrent Causation: What to Do When an Insurance Company Denies Your Claim

Last month, the National Hurricane Center issued its first-ever tropical storm watch for Southern California. A watch turned into a tropical storm warning a few hours later and on August 18th Hurricane Hillary made landfall on the western coast. To make matters worse, while Hilary was making landfall, a large portion of Southern California was struck by a 5.1 magnitude earthquake. Catastrophe modelers estimate that insurance loss from these events will be close to $600 million in the United States.

But will all those losses actually be covered?

For many homeowners, a large storm – be it a hurricane, earthquake, tornado, or hail – may lead to even larger headaches when it comes time to make a claim with your insurance carrier. Oftentimes with storms like these, there are losses at a property that result from multiple causes. For example, a hailstorm might cause roof damage which leads to water damage, which in turn causes mold. When that happens, homeowners may find their claims denied and confusion as to why.

The answer is concurrent causation. In property insurance, this term refers to a situation where there is a mixture of covered and uncovered losses acting together (either in sequence or simultaneously) to produce the same property damage.

To go back to our example, your insurance company might accept a claim for the roof damage from hail but deny your claim for the mold caused by the incoming water. They’ll cite policy language which says mold isn’t covered or they may tell you that the sitting water is an exclusion under the policy. But as you well know, the mold would not have occurred but for the water damage which would not have occurred but for the hailstorm, a covered loss. So, shouldn’t all of the loss be covered?

As with most things insurance related, there is wide disagreement. Insurance companies have attempted for years to apply anti-concurrent causation language in policies with mixed results. Some states have accepted these additions, some have not, but in every state, you can bet that insurance companies will fight with homeowners to deny claims that would normally be covered. As with many things insurance related, not all policies are written the same, and how each policy treats this issue is different, but the benefit of coverage should always go to the policyholder unless there is a clear exclusion otherwise.

At Smith Jadin Johnson, we provide assistance to policyholders in a wide range of states and in a wide range of complex commercial and residential property disputes. We understand the complications typical of these disputes and can help you get the most out of your policy. An insurance claim denial is not the end of the road. We’re here to review the facts of your specific case and policy and help you find the right solution.  Many times, there is coverage for concurrent events if you know where to look. Contact our office today so you can get on the right road to recovery.