Other Insurance involves situations wherein two or more insurers provide coverage for an asset or assets. Most varieties of insurance policies, with the exception of life insurance, include “other insurance clauses”. These clauses refer to the provision which details how each insurer will cover a part of the claim for the same loss. The portion of each insurer’s payout is typically proportional to the policy’s insured amount.
Some insurance clauses, however, specify that only one insurer will pay, while the other is in no way responsible. Based on the other insurance clause, the amount that other insurers are required to pay differs from one policy to another.
