Alabama Property and Casualty Practice Exam

Under a special cause of loss form, who bears the burden of proof following a claim?

1. insured

2. company

3. assignee

4. mortgagee

The correct answer is: company

Under a special cause of loss form, the insurance company typically bears the burden of proof following a claim. This is because a special cause of loss form covers losses resulting from the risks specifically listed in the policy, and when a claim is made, the insurer must demonstrate that a covered peril caused the loss. In the context of an insurance claim, the insured must provide sufficient evidence that a loss occurred and falls within the coverage provided by the policy; however, once the insured provides this initial proof of loss, it is the insurer's responsibility to investigate the claim further and establish whether the loss was indeed due to a covered risk. This places the onus on the insurer to validate that a loss is not covered by policy exclusions or other factors. Understanding this distribution of the burden of proof is crucial for both policyholders and insurers, as it dictates how claim disputes are resolved and informs parties involved about their responsibilities during the claims process.