What happens if multiple insurance policies cover the same loss?

When multiple insurance policies cover the same loss, the Other Insurance Provision comes into play to determine how the claims will be handled. This provision explains how insurers will coordinate benefits when more than one policy applies to a particular loss. It is designed to prevent the insured from profiting from multiple claims for the same loss and typically outlines whether the policies will share the cost proportionately or if one policy will be the primary insurer while the others serve as secondary coverage.

In practical terms, the Other Insurance Provision ensures that the insured is not overcompensated for a loss; instead, it allows for fair distribution of the payment among the relevant insurers, depending on the specific language in each policy. This mechanism maintains the integrity of the insurance process and helps stabilize the insurance marketplace.

Choosing from the available insurance options is restricted by the contractual agreements, and outright denial of additional claims does not occur unless specifically stated in a policy, making the Other Insurance Provision the core principle that guides the resolution of claims in such scenarios.