Causation under Ethiopian Motor Vehicle Insurance, the Law and Practice
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Date
2021-05
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Addis Ababa University
Abstract
Causation is a fundamental component of insurance law. Causation in insurance law is an area where
courts continuously experience difficulties. Causation is a crucial issue in ascertaining whether certain
loss or damage is caused by a risk covered by an insurance policy. As an important principle of insurance
law, the principle of causation is of great significance for determining whether an insurer should assume
insurance liability. Many times, it is impossible to come to consensus on the liability or non-liability of
the insurers and the insured; this is often the case where the causation of the peril is in issue. Insured’s
desire indemnity against the risk of certain types of losses; insurers issue policies which provide such
indemnity in the event of certain perils, often with other perils being specifically excluded. Any coverage
provided by the policy is contingent upon there being a causal connection between the loss, and a covered
peril. In insurance law, it is recognized that loss or damage may be the product of multiple causes. A
particular action or state of affairs may be serially or sequentially give rise to other factors, which may
ultimately produce a loss; also, independent factors , neither of which is sufficient in itself to cause a loss,
may do so when combined. Now, in insurance law, for the insurance company to be made liable first of
all the cause of loss should be looked upon.
The area of different insurances seems old but the concept of proximate cause in these areas, especially
in Ethiopia, is a new and upcoming concept. In this research paper, critically examines causation under
Ethiopian insurance law and the application by Ethiopian courts with an emphasis on motor vehicle
insurance to have a precise understanding about how Ethiopian courts treat causation. The most frequent
type of issues which courts face when they deals with insurance cases is whether a risk cover by the
policy caused the loss, because before an insured can recover from his insurer for the loss he has
sustained, it is necessary to determine the cause of the loss.
Finally, this research paper examines the impact of our legal system's lack of a rule of causation. The
researcher proposes a legislative action to be taken to bring forward a solution for settling causation
disputes in insurance cases and lacunae of law.