Page 26 - Motor Insurance Ebook IC 72

The Insurance Times

working actively from a new and independent source.
However, the term 'proximate cause' simply means the
'last cause'. But it should be the most effective, dominant
or real cause for the loss. That is to say, the peril insured
against must be the direct, dominant, efficient or
material cause for the insured's loss.

This principle is equally applicable to Motor polices for
both own damage and third party liability in the same
force and same manner as it is applicable to other
policies.

For example, own damage claim of the vehicle is payable
only if the same is proximately caused by an insured
peril. Similarly, in third party insurance also the claim is
payable only if the same is proximately caused by an
accident or arisen out of the use of a motor vehicle in a
public place.

However the scope of the proximate cause in a third
party insurance claim is much wider in comparison to
its literally meaning.

The doctrine is also applicable to third party claims where
in third party injury or property damage must be
proximately caused by the negligence of the insured for
which he is held legally liable to pay damages..

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