Concurrent Insurance
Concurrent insurance is a type of insurance coverage that applies when two or more policies cover the same loss or damage. In this situation, the policies are said to be concurrent, meaning that they provide coverage simultaneously for the same claim.
How Concurrent Insurance Works:
- Multiple Policies: Two or more insurance policies are written to cover the same insured, property, or liability.
- Loss Occurs: A loss or damage occurs.
- Claims Made: Claims are filed under each policy.
- Claims Adjusters: Adjusters from each company investigate and settle the claim.
- Coverage Amount: The total amount of coverage is determined by the sum of the limits of each policy.
- Excess Coverage: If the total amount of coverage exceeds the amount of the loss, any excess coverage is paid by the insured.
Examples of Concurrent Insurance:
- Auto and Home Insurance: If your car is damaged in a fire at your home, both your auto insurance and your homeowners insurance may provide coverage for the damage.
- Business and Personal Insurance: If a business is damaged by a fire, both your business insurance and your personal homeowners insurance may provide coverage.
- Liability Insurance: If you are found liable for a car accident, your liability insurance policy may cover your legal expenses.
Key Considerations:
- Comparable Coverage: The policies must provide coverage for similar risks and losses.
- Primary and Excess Coverage: The primary policy will be the primary source of coverage, with the excess policy providing coverage for any amount exceeding the primary policy limits.
- Coordination of Benefits: The policies may have provisions for coordinating benefits to avoid double coverage or duplication of payments.
- Deductibles: Each policy may have its own deductible, which is the amount the insured pays out of pocket before coverage kicks in.
Benefits of Concurrent Insurance:
- Enhanced Coverage: Provides additional coverage options.
- Increased Limits: Can increase the overall coverage limits.
- Reduced Deductibles: May reduce the deductible amount.
- Simplified Claims Handling: Can streamline the claims handling process.
FAQs
What is concurrent insurance?
Concurrent insurance refers to having two or more insurance policies that provide the same or similar coverage for the same risk or asset. This means that multiple insurers may be liable to pay for a claim arising from the same event.
What is a concurrent insurance policy?
A concurrent insurance policy is one of the multiple insurance policies taken out to cover the same risk or asset. It ensures that if one insurer fails to cover a claim fully, the other policy can help cover the remaining amount, providing additional protection.
What is an example of a concurrent cause?
A concurrent cause occurs when two or more independent events contribute to a loss or damage. For example, if a house is damaged by both a fire and a subsequent storm, both events are considered concurrent causes of the damage.
What is double insurance?
Double insurance, also known as dual insurance, occurs when a policyholder has two or more insurance policies covering the same risk or asset. This can lead to a situation where multiple insurers may have to pay out claims, depending on the policy terms.
What is a concurrent claim?
A concurrent claim arises when a policyholder makes a claim on more than one insurance policy for the same loss or damage. Each insurer may be required to pay a portion of the claim, depending on the policy terms and the extent of coverage.
