The fundamental purpose for government regulation of insurers and agents is to protect American consumers. Effective consumer protection that focuses on local needs is the hallmark of state insurance regulation. State regulators understand local and regional markets and the needs of consumers in these markets. State policymakers recognize that consumer protection as their highest job priority. Meaningful evaluation of the existing state regulatory system or any federal alternative must begin with a hard look at its impact on current protections that the public expects. If the originating cause is excluded, but the damage results from a subsequent covered peril, the loss may still be covered.


Termites in a tree trunk cause the tree to fall on the house, of its own weight. The policy excludes losses from termites but covers loss from falling objects. Although the loss was proximately caused by an excluded peril, the resultant damage is covered. The insurer may specifically exclude some results arising from a covered originating cause. For example, coverage may be included for windstorm damage but the insurer may exclude loss from associated rising waters and wave wash, proximately caused by the storm.