Proximate Cause

Is that which, in a natural and continuous

sequence, unbroken by any new independent cause,
produces an event and without which the event
would not have occurred.

Examples:
(1) If fire causes an explosion which results in
a loss, fire is the proximate cause of the
LOSS loss while explosion is the immediate
cause. The insurer is liable where either
peril is covered by the policy.
Baguilat, Kayla (2) If a house is insured against fire and it is
Espiritu, Nadine damaged by the falling of a wall of a
Galano, Faith Alexis neighboring building (a peril not
contemplated by the contract) which is on
fire, the fire is the proximate cause
Section 85. An agreement not to transfer the claim
although no part of the insured house is
of the insured against the insurer after the loss has actually on fire
happened, is void if made before the loss except as (3) Even if the fire results only after the fall of
otherwise provided in the case of life insurance. the building and as a consequence of such,
nevertheless, the damage, so far as it is
attributable to the fire and not merely to
Claim the falling of the building, is a loss by fire.
 May be defined as a demand for Here, the fire is the immediate cause of the
the satisfaction of a loss suffered loss.
within the purview of an insured (4) If, however, the fall of the building,
policy although it occurs after a fire, is not result
of the fire, the loss is not covered by the
 It may be made by the party
policy. In this case, fire is just the remote
insured, the insurer with the right cause of the loss for which an insurer is
of subrogation, or a non-party but NOT liable.
with a right against the insured.
Hostile and Friendly fires
1. When fire is friendly fire- so long as a fire
Section 86. Unless otherwise provided by the burns in a place where it was intended to
policy, an insurer is liable for a loss of which a peril burn,and ought to be, it is to be regarded
insured against was the proximate cause, although as merely agency for the accomplishment of
a peril not contemplated by the contract may have some purpose and not as a hostile peril.
been a remote cause of the loss; but he is not liable
for a loss of which the peril insured against was only
a remote cause. 2. When fire a hostile fire- it is hostile when it
occurs outside of the usual confines or
Loss begins as a friendly fire and becomes
hostile by escaping from the place where it
May be defined as the injury, damage or
ought to be to some place where it ought
liability sustained by the insured in consequence of not to be.
the happening of one or more of the perils against
which the insurer, in consideration of the premium,
has undertaken to indemnify the insured. Section 87. An insurer is liable where the thing
insured is rescued from a peril insured against
Scope of Loss that would otherwise have caused a loss, if in the
 The word “loss” in insurance law course of such rescue, the thing is exposed to
embraces bodily injury, including peril not insured against, which permanently
death, or property damage or deprives the insured of its possession, in whole
destruction. or in part; or where a loss is caused by efforts to
 It includes loss of income or rescue the thing insured from a peril insured
profits and legal liability to a third against.
party.
1. Where the loss took place while being
rescued from the peril
Remote cause
The insurer is liable where the insured is
Is defined as that cause which some permanently deprived of the possession, in whole or
independent force merely took advantage of to in part, of the thing insured against provided the
accomplish something which is not the natural said property would have been lost by the peril
effect thereof insured against had there been no attempt to rescue
 The insurer will not be liable if the it.
peril insured against is a mere
remote cause Example:
Loss of goods by theft during the removal of the Fire: proximate cause
goods to save them from loss by fire is covered by a Explosion: immediate cause
policy against fire.

Note: Note: the insurer/insurance company has the

burden of proving that the loss is caused by the
The policy against fire may contain a stipulation risks excepted.
exempting the insurer from any other liability for
any kind of loss besides loss by fire. Section 89. An insurer is not liable for a loss
caused by the willful act or through the
2. Where the loss is caused by efforts to connivance of the insured; but he is not
rescue the thing insured from a peril exonerated by the negligence of the insured, or
insured against of the insurance agents or others.

It is the efforts to rescue the thing that caused the Rationale: It is to protect the insured against the
loss. consequences of his own negligence and that of his
agents. Thus, it is a basic rule in insurance that the
Example: carelessness and negligence of the insured or his
agents constitute no defense on the part of the
Damages to goods by being trampled on or thrown insurer.
about in the efforts to put out the fire are covered by
the policy of insurance. Effects of Gross Negligence

The insurer is also liable for loss caused by 1. Insurer liable (Ordinary negligence)
preparing the goods for removal from the premises
although they are not actually carried out if at the The insurer is not relieved from liability by
time the work of removal is begun, the property is in the mere fact that the loss was caused by
such danger of fire that a reasonably prudent man the negligence of the insured or of his
would attempt to protect it. agents.

Example: Example:

Damage to the insured property caused by water a.) A, whose life was insured, drank
during attempt to save it from fire is generally whiskey which contained wood
regarded as resulting directly from the fire itself and alcohol. His negligence in drinking
as making the insurer liable therefor. whiskey was no defense in an
action on the policy for his death
Note: the insured is bound to exercise a reasonable resulting from consumption of
degree of care in removing the goods. wood alcohol contained in the
beverage.

b.) Lim was covered by a personal

Section 88. Where a peril is especially excepted
accident insurance. The insured
in a contract of insurance, a loss, which would
was playing with his hand gun,
not have occurred but for such peril, is thereby
from which he had previously
excepted although the immediate cause of the
removed the magazine during the
loss was a peril which was not excepted.
birthday party of his mother. As
Lim’s secretary was watching
Where proximate cause is an excepted peril
television, Lim stood infront of her
The insurer is not liable if the proximate cause of the and pointed the gun on her. She
loss is a peril excepted from the policy although the pushed it aside and said it might
immediate cause is a peril not excepted. be loaded. He assured her it was
not and then pointed it to his
Example: temple. The next moment there
was an explosion and Lim
In fire insurance, if an explosion occurs first and slumped to the floor dead.
causes a fire which results in a loss, the insurer is
not liable. The insurer was liable as the
cause of Lim’s death was
Explosion: proximate cause accidental. But it should not
Fire: immediate cause prevent his widow from recovering
from the insurance policy he
obtained precisely against
However, if fire occurs first then explosion accident. There is nothing in the
consequently happens, the insurer is liable. policy that relieves the insurer of
 the responsibility to pay the The insured may not recover from the
indemnity agreed upon if the insurer. The difference between a formal
insuredis shown to have claim under the oath of approximately
contributed to his own accident. Php190,000.00 alleged as the loss due to
fire, and Php50,000.00, the top figure for
2. Insurer not liable (Gross negligence) the loss conceded by impartial witnesses, is
so great to indicate false statement made
The insurer is relieved from liability when intentionally and willfully. A false and
such negligence was of such gross material statement made with intent to
character as to amount to misconduct or deceive or defraud avoids an insurance
wrongful acts. policy.

Example: Fraud Must Be Proven

The insured was not allowed to recover in a While it is an established doctrine that a
marine insurance policy covering a barge false material statement made in the notice
which ran aground because of the strong or proof of loss with intent to defraud or
waves brought about by the bad weather. deceive would discharge the insurer from
The court found that there was blatant liability, however, fraud could not be
negligence on the part of the employees of presumed but must be proven by clear and
the insured when the operator of the tug convincing evidence.
boat immediately left the barge at the wharf
despite the looming bad weather. Example:
Negligence was likewise exhibited by the
representative of the insured who did not Yatsil obtained several policies against the
heed the request that the barge be moved fire covering stock of general merchandise.
to a more secure place. The court found The insured stocks were in a mezzanine 60
that the prudent thing to do, as was done centimeters on its narrowest side and 2 ½
by the other sea vessels at the wharf during meters on its widest side. The stocks were
the time in question was to transfer the burned. The insured filed a claim for the
vessel to a safer wharf. Only the subject loss and asserted that the value of the
vessel was left at the wharf. burned merchandise was Php22,700.00.
The insurer, on the other hand, contended
that the insured forfeited its right to cover
Willful Act or Connivance on the policies because it grossly
exaggerated its claim in a fraudulent
The law deprives the insured of his right to manner. The insurer argued that the
recover the loss caused by his willful act or insured’s place was too small to hold goods
connivance with others to suppress a worth Php22,700.00 and the merchandise
public menace. could not have been worth more than Php
1000.00.
Example:
Was the insurer liable?
When the insured intentionally burned his
house which was insured against fire, the The difference in the valuation of the loss
insurer is not liable. as claimed by the insured and as otherwise
averred by the insurer, did not itself
Effect of Fraudulent Claim warrant a finding of fraud in the estimate
of loss. Fraud cannot be presumed but
Fraud in the statement of loss operates to must be established by clear and
defeat the recovery upon any part of the convincing evidence. And since there was
policy for the policy is avoided by any false no clear evidence of fraud, the insurer was
and material misrepresentation in the liable.
statement of loss and all benefits under the
policy are forfeited.

Example:

The formal claim of the insured after the

occurrence of the loss stated that
Php190,000.00 worth of goods were lost
due to fire. Impartial witnesses, however,
attested that the value of the goods lost
was only Php50,000.00.