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Florida Supreme Court Supports Concurrent Cause Doctrine

Written by Jordan W. Jacob, Esq.

December 1, 2016
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Today, December 1, 2016, the Florida Supreme Court issued a favorable opinion for property owners and policyholder advocates alike by supporting the application of the “concurrent cause doctrine” in first-party property insurance disputes. Specifically, the Court concluded “that when independent perils converge and no single cause can be considered the sole or proximate cause, it is appropriate to apply the concurring cause doctrine.”
Last year, I wrote an article questioning whether the Florida Supreme Court in the matter Sebo v. American Home Assurance Co., SC14-897, would abolish the long-standing “concurrent cause doctrine” as it pertains to first-party property insurance matters. The concurrent cause doctrine generally holds that when two or more perils combine to cause a property loss, so long as one of the perils is covered under an applicable insurance policy, the entire loss will be covered. In contrast, when two or more perils combine to cause a loss, the “efficient proximate cause doctrine” focuses on which individual peril was the most substantial or responsible factor in the loss and excludes the loss if the most substantial factor is excluded in an applicable policy.

The Florida Supreme Court was considering this issue on review of a decision out of the Second District Court of Appeal in the matter American Home Assurance Co. v. Sebo, 141 So. 3d 195 (Fla. 2d DCA 2013),on the ground that it expressly and directly conflicts with a decision out of the Third District Court of Appeal in Wallach v. Rosenberg, 527 So. 2d 1386 (Fla. 3d DCA 1988), on a question of law. The Third District, in Wallach, was the first Florida court to apply the concurrent cause doctrine to cases involving multiple perils and a first-party insurance policy. The Wallach decision was precedent in Florida for over two decades until the Second District’s disagreement in 2013.

In reaching is majority opinion today, the Supreme Court ultimately disagreed with the Second District court’s finding that the concurrent cause doctrine “nullifies all exclusionary language” in a property owner’s insurance policy. Further, and most importantly, the Supreme Court noted that because the insurance company “did not explicitly avoid applying the [concurrent cause doctrine]…the plain language of the policy does not preclude recovery.”

In other words, the Supreme Court held that if an insurance company wants to expressly preclude recovery for any property loss that is caused by two or more independent perils, where at least one of the perils is covered under a policy and one or more causes is excluded under the same policy, the insurance company should write specific and unambiguous language in its policy to that effect.

Because the insurance companies are the ones who prepare and draft insurance policies, and property owners are generally forced to accept their terms, it can be anticipated that newer policies will be drafted to address and explicitly exclude all types of losses caused by any combination of two or more perils.

If you are a property owner in Florida and have a question about the impact of this decision, or if you or someone you know has a general question about your property insurance policy, please contact me today.

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