Theft, Vandalism and Proximate Cause

October 12, 2007

I have had occasional calls from clients reporting, “Vandals have broken into my home and stolen a bunch of stuff.”

Whoa! Thieves are thieves and vandals are vandals – the terms are not synonymous. Out comes my jolly old Webster’s dictionary. Quote:

“Thief: One who steals, especially secretly.”

“Vandal: One who willfully or ignorantly mars or destroys property belonging to another or to the public.”

So, a thief is a guy who breaks into your house on Friday night when you are at the pictures and takes away your TV, laptop and the family jewels. And a vandal is a lovely person who, because of some slight insanity or because he wants to be a nuisance, derives morbid pleasure from putting a stone through your plate-glass living room window, blowing up your mailbox, or stroking the paint off the fender of your shiny new car with a key.

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

Proximate Cause

Some weeks ago, a client phoned to say that his Range Rover had been stolen. His automobile insurance policy didn’t include 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 his vehicle’s auto policy.

“Tough luck for INS (the National Insurance Institute),” 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.

When there is a claim, insurance companies look at exactly what caused the loss. In the case of my client, it was the theft of the car. It was the thief who wrecked it; theft was the proximate cause of the damage to the car. My client didn’t have coverage for theft, so the insurance company would not honor a claim, even though he had coverage for collision. “Tough luck.”

The proximate cause concept can work against you, as in the case of this man’s Range Rover, but it can also work in your favor. Three examples:

Many people do not carry fire coverage on their auto insurance policies. Suppose a car were to catch fire and be totaled as a result of a small collision. If the car’s auto policy included collision coverage, the insurance company would pay because collision was the proximate cause of the fire.

If a seaside house covered for earthquakes (but not for floods) were damaged by the floodwaters of a tsunami, the insurance would pay. The proximate cause of the flood was the tsunami; as all tsunamis are caused by earthquakes, the insurance company would pay for the flood damage.

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

 

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