What does the Anti-Concurrent Causation (ACC) Clause state regarding covered and excluded perils?

The Anti-Concurrent Causation (ACC) Clause is a provision commonly found in insurance policies that addresses situations where multiple perils contribute to a loss. This clause states that if a loss is caused by a combination of covered and excluded perils, then the entire loss may be denied. The rationale behind this clause is to prevent policyholders from receiving compensation for losses arising from excluded perils simply because a covered peril was also involved in the loss.

In practical terms, if a damage event occurs that's influenced by both a covered peril (like fire) and an excluded peril (like flood), the ACC Clause means the insurer may not pay for the loss at all. This clause emphasizes the importance of understanding the distinction between covered and excluded perils in an insurance policy, as the presence of any excluded peril can impact the claim outcome significantly.

This understanding is crucial for policyholders, as it highlights the need to maintain awareness of the limitations in their coverage and the potential for complete denial of claims when multiple causative factors are involved.