PROPERTY TERMS & CONCEPTS · 6 MIN READ

Causation Doctrines, Triggers, and Vacancy Rules

Property coverage turns on causation, and the exam tests a chain of doctrines. The threshold trigger is direct physical loss or damage to covered property — economic loss without physical damage does not open the policy. Direct loss is the physical harm itself; indirect (consequential) loss is the downstream financial fallout, covered only by time-element forms. When multiple causes combine, the traditional efficient-proximate-cause doctrine asks which peril set the chain in motion. Modern forms override it with anti-concurrent-causation (ACC) lead-ins: loss to which an excluded peril contributed, directly or indirectly, in any sequence, is excluded. Courts apply ACC on a loss-element basis — in a hurricane, roof damage caused solely by wind stays covered, while foundation damage to which excluded earth movement contributed is barred. The mirror image is the ensuing-loss carve-back: when an excluded cause (faulty workmanship, wear) produces a separately covered peril, the ensuing loss is covered even though the original defect is not. The classic burnout illustration: artificially generated electrical current that fries a motor is excluded, but if the arcing starts a hostile fire, the fire damage — including fire damage to the motor itself — is fully covered. Burden of proof follows form architecture. Under named perils, the insured must prove a listed peril caused the loss; under open perils, the insured need only show direct physical loss, and the insurer must prove an exclusion applies. Related boundary lines recur: sudden-and-accidental events are covered where continuous or repeated seepage is not; collapse (an abrupt falling down) is distinguished from mere settling and cracking; theft requires evidence of taking, while mysterious disappearance without such evidence is treated differently; and sinkhole collapse can be covered by endorsement even though earth movement generally is excluded. Vacancy is the conditions-side causation rule with hard numbers. Under CP 00 10, a building is vacant when less than 31 percent of its square footage is used for customary operations, and if vacancy persists more than 60 consecutive days before a loss, two consequences follow: six perils — vandalism, sprinkler leakage, building glass breakage, water damage, theft, and attempted theft — are excluded outright, and recovery for any other covered cause is reduced by 15 percent. Homeowners forms draw a companion distinction between vacant (empty of contents) and merely unoccupied (furnished but nobody home), because the two states carry different coverage consequences.