In insurance terms, what is proximate cause?

Proximate cause refers to the principle that establishes a direct relationship between the event that caused a loss and the loss itself. In the context of insurance, it determines whether a particular peril is covered under a policy by demonstrating that the loss was a foreseeable result of an insured risk. For example, if a fire (the proximate cause) damages a property, the insurer would evaluate whether the fire was a covered peril in the policy. Thus, understanding proximate cause is crucial because it helps in deciding if a claim is valid based on whether the loss directly resulted from a specific covered event. This concept ensures that claims are connected to the risks insured against, upholding the integrity of the insurance contract.