The rule is "causa proxima non remota spectatur" i.e.

, the proximate or immediate and not the remote cause is to

looked to.
This is a principle of insurance laying that the insurer is liable only for those losses which have been
proximately caused by the peril insured against. In other words, in order to make the insurer liable for a loss, the
nearest or immediate or last cause is to be looked into, and if it is the peril insured against, the insured can
recover. This is the rule of "Causa Proxima". Insurers are not liable for remote causes and remote consequences
even if they belong to the category of insured perils. The question, which is the causa proxima of the loss can
only arise where there has been a succession of causes. When a result has been brought about by two causes,
you must in the insurance law, look to the nearest cause, although the result, no doubt, would not have happened
without the remote cause...The cause which is truly proximate is that which is "Proximate in Efficiency". The
law will not allow the assured to go back in the succession of causes to find out what is the original cause of
loss.
CASE STUDY: In a marine policy, the goods were insured against damage by sea-water. Some rats on board
bored a hole in a zinc pipe in the bath which caused sea-water to pour out and damage the goods. The
underwriters contented that as they had not insured against the damage by rats they were not bound to pay. It
was held that the proximate cause of damage being sea-water the insured was entitled to damages, the rats being
the remote acuse (Hamilton vs Pandrof).
If the loss is caused by the operation of more than one peril simultaneously and if one of the peril is an excepted
(uninsured) one, the insurer shall be liable to the extents of the effects of insured peril, if it can be separately
ascertained. The insurer will not be liable at all if the effects of the insured peril and the excepted one cannot be
separated.
The principle of causa proxima applies mostly in fire and marine insurances,it is applicable in the life insurance
as well because in 'personal accident policies' the proximate cause of the death should be accident. In case of
natural death the insurer is not liable thereon.

First we have to know the meaning of proximate cause, it means the Actual cause of the loss due by
which a loss has occurred. No policy covers all types of risk. Insurance company is liable to indemnify
only against the insured perils. Causa Proxima is necessary for a valid contract, of insurance.
It has been defined as The Active and most efficient cause that sets in motion a train of events
which brings about a result, without the intervention of any force started and working Actively
from a new and independent source.
Proximate cause literally means the nearest cause or the direct cause. Thus the insurer is only liable
for loss, if the risk insured against is the proximate to the last cause of loss. If only one cause of loss is
identified, it is not required to go further if that cause is insured against. If there is a series of causes of
damage or loss, then in such a situation the principle of Causa Proxima is applied. The insurer is
responsible only if the nearest cause comes within the meaning of the risk insured. Thus if the closest peril
is the one insured against risk, the loss of the subject matter would be compensated.
The doctrine of proximate cause applies to motor insurance as to other classes of insurance. The loss
or damage to the vehicle is indemnified only if it is proximately caused by one of the insured
perils. The doctrine also applies to third party claims. The third party injury or damage must be
proximately caused by the negligence of the insured for which he is held legally liable to pay damages.