California Department Reminds Insurers of Efficient Proximate Cause Doctrine

Recently California has experienced a succession of strong rain storms caused by an atmospheric river, and Wednesday’s storm is the third such storm in two weeks. The ground is water-logged triggering concerns about flooding, especially since the storms come after years of drought conditions.

Droughts strip the ground of vegetation and weaken the dirt, making the ground more susceptible to landslides and mudslides when strong rains occur. The Department of Insurance has issued a bulletin regarding the standard mudflow, landslide, and earth movement exclusions found in most property policies. While such losses are excluded, the department reminds insurers that California is governed by the doctrine of efficient proximate cause, which states that an insurer is liable for a loss if a peril insured against is the proximate cause, even though an excluded peril may be a remote cause of the loss. If it is determined that recent wildfires or other perils are the efficient proximate cause of any mudslide, landslide or similar excluded event, such damage will be covered regardless of the exclusion in the policy.