PRINCIPLE OF CAUSA PROXIMA (NEAREST CAUSE)


 PRINCIPLE OF CAUSA PROXIMA (NEAREST CAUSE)
 The loss of insured property may be brought on by more than one cause in succession to another.
 The property may be insured against some causes and not against all causes.
 In such an instance, the proximate cause or nearest reason for loss is can be found out.
 If the proximate cause is one which is insured against, the insurance company is likely to pay the compensation and vice versa.
Principle of Causa Proxima (a Latin phrase), or in simple English words, the Principle of Proximate (i.e
Nearest) Cause, means whenever a loss is brought on by more than one causes, the proximate or the nearest or the closest cause should be taken into account to determine the liability of the insurer.
 General Principles and Concepts of Insurance 
The principle states that to learn perhaps the insurer is liable for losing or not, the proximate (closest)and not the remote (farest) must certanly be looked into.
For instance: A cargo ship's base was punctured because of rats and so sea water entered and cargo was damaged. Here you can find two causes for the damage of the cargo ship - (i) The cargo ship getting punctured because of rats, and (ii) The sea water entering ship through puncture. The danger of sea water is insured but the first cause is not. The nearest reason for damage is sea water that is insured and which means insurer must pay the compensation.
However, in the event of life insurance, the principle of Causa Proxima doesn't apply. Whatever will be the reason of death (whether an all natural death or an unnatural death) the insurer is liable to pay the total amount of insurance.



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