Abracadabra: anti-concurrent cause and the search for ‘illusory’ insurance coverage

I was looking through my Bloglines feedreader last night under my folder labeled "anti-concurrent cause," and saw this really good post from the Slabbed blog.   This is a fascinating discussion not only of Katrina damage, but of the theory of illusory insurance coverage.  It’s old, now, the post, from the nostalgia file, but it is still worth talking about.  

Now, as many of you know, in the course of my work I represent both policyholders and insurance companies, so I really don’t have a dog in the fight (apologies to Michael Vick, I know the metaphor might be a touchy subject), and I have no particular ideology when it comes to insurance.  I like insurance theory because it, in many ways, is like Plato’s Allegory of the Cave, in his Republic: it is merely a metaphor for the human condition and the limits not only of attempts to order and describe human behavior according to the logos — rational principles in harmony with the universe  — but also of the limits of human understanding.  The concept of causation, of which anti-concurrent cause theory is a part, and of ‘illusory’ coverage are just some of the shadows on Plato’s cave wall. 

I’m sure that if you go looking for illusory coverage you can find or think of some examples, but as it is discussed in most case law, illusory coverage seems to me a particularly hard-to-pin-down shadow on the wall.  In some ways, the theory of illusory coverage is itself illusory, in other words, and I have great confidence that whatever it is and wherever it is, it is not found in anti-concurrent cause language in insurance policies, at least the way I explain anti-concurrent cause.  So I can’t agree with the premise presented, both by the author, nowdoucit, and quoted material from policyholder lawyer Chip Merlin, that anti-concurrent cause language is in any way ambiguous or illusory. 

The key to what I am saying here is that anti-concurrent cause is merely a causation analysis that is present in the contract and overturns the common law default analysis of efficient proximate cause, and another key is the realization that insurance policy language is full of special definitions and terms of art that are not necessarily the same as English.  This fact of life is because insurance policy drafters attempt to respond, in addition to the changes in the nature and amount of losses, to court decisions.  I don’t see anti-concurrent cause as actually removing any coverage from a policy, but even if it did, this is not a startling idea — exclusions do the same.  A causation analysis just defines the relationship between forces and coverage, it just tells how to apply the language and terms of the policy.   Anti-concurrent cause analysis may take some work to understand, but at it’s heart, it exists to keep uncovered damage from being covered, not the other way around.  Once you accept that, and it is difficult for many to accept, it is a direct route to realizing that the words "concurrently or in sequence," as found in anti-concurrent cause clauses, are words that are not nearly as expansive as might be imagined on first blush, but instead are pretty limited in application. 

I could go on and on about this — I have before and I will again.  I’m going to be speaking about Katrina damage, wind vs. water (in the Vegas line wind is currently a two-touchdown favorite for coverage) and anti-concurrent cause theory and application in Seattle later this month at the PLRB conference.  For reasons I don’t fully understand, I am actually speaking twice, they tell me, on March 24 and 26, I think are the dates.  If you’re there, come to one of the speeches and we can talk about these shadows on the cave wall. 

  

6 Comments

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6 Responses to Abracadabra: anti-concurrent cause and the search for ‘illusory’ insurance coverage

  1. Seth Chandler

    Welcome back to the Blogosphere, David. The concurrent cause issue is likely to be rearing up in Texas for losses following Hurricane Ike. There are apparently a significant number of homes severely damaged by Ike that had windstorm coverage but no flood coverage. The homeowners say “wind”; the Texas Windstorm Insurance Association says “surge” or mostly surge. For a flavor of the debate, see http://www.propertyinsurancecoveragelaw.com/2009/03/articles/texas-insurers/the-parable-of-hurricane-ike-insurance-claims . The homeowners are likely to be burdened by cases such as Wallis v. United Services Auto Ins. Co., 2 S.W.3d 300 (Tex. App. 1999) rejecting efficient proximate cause. See also All Saints Catholic Church v. United Nat. Ins. co., 257 S.W.3d 800 (Tex. App. 2008).

  2. David,
    If I represented insurance companies like you do, I wouldn’t agree that the clause is ambiguous either.
    What is a matter of fact is that the State Farm agent selling the policy in Bay St. Louis could not understand the clause either. If the people State Farm trains and then authorizes to sell the policy cannot figure it out, I would suggest that the lay person in the street cannot either. Seems to me some people would think the clause is ambiguous in some regards.
    Good to see you publishing again. You have tremendous talent for writing.

  3. Thank you for the recognition as well as the gentle rejection of the SLABBED/Merlin premise re: illusory coverage due to ambiguity in policy language on anti-concurrent causation.
    Over the weekend, I spent some time exploring the shadows of Plato’s cave. Found it very interesting – so much so, in fact, that I wrote about the adventure and may do so again given the many shadows of Katrina insurance litigation.

  4. claimsguy

    Chip enunciates an interesting new test for ambiguity: the Bay Saint Louis agent test. Is there any case law adopting that test?
    Chip likes to confuse “difficult” with “ambiguous”, as does every other policyholder lawyer on the planet. But that is wrong. “Difficult” does NOT equal “ambiguous”.

  5. Teri Eaton

    So glad to have you back again!

  6. Heads up

    March 11: Oral Argument 11th Circuit Court of Appeals, Appeal of Civil Contempt filed by Dick Scruggs.
    Welcome back,David!