Other Insurance Clause

Example

“When Tom's laptop was stolen from his car, both his auto insurance and renters insurance had other insurance clauses that required coordination to determine which policy would pay the claim first.”

Memory Tip

Remember 'No double dipping' - other insurance clauses prevent you from getting paid twice for the same loss by multiple insurers.

Why It Matters

These clauses ensure fair claim handling when multiple policies apply and prevent insurance fraud while protecting insurers from overpaying claims. Understanding how these clauses work helps policyholders know what to expect during the claims process and avoid delays or disputes between insurance companies.

Common Misconception

Many people think having multiple insurance policies covering the same item means they can collect from all of them and potentially profit from a loss. However, other insurance clauses ensure that total payments never exceed actual damages, and insurance companies coordinate to split the costs according to their policy terms.

In Practice

Jennifer has a car accident causing $10,000 in damage. Her personal auto policy has a $500 deductible, and her employer's fleet policy also covers her vehicle with a $1,000 deductible. The other insurance clauses specify that her personal policy is primary. Her personal insurer pays $9,500 ($10,000 minus her $500 deductible), and the employer's policy pays nothing since the loss was fully covered by the primary policy.

Etymology

Developed in insurance law to address 'other' insurance beyond the primary policy, with 'clause' from Latin 'clausula' meaning a concluding provision or condition in a legal document.

Common Misspellings

Related Terms

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Other insurance terms you should know

See Also