What Does Concurrent Insurance Mean?
Concurrent insurance refers to two or more policies that cover the same exposure or risk as well as having the same policy period and coverage triggers. It is often used when the insured entity—person or business—buys policies aside from the primary policy with additional policies that provide excess coverage. This is a good idea especially among individuals who believe that they are at risk to perils that cannot be covered by a single policy. Buying concurrent policies is a prudent decision if the cost of such insurance is not prohibitive.
Insuranceopedia Explains Concurrent Insurance
The challenge with concurrent insurance is that it is difficult to determine which insurance policy will pay for the losses as both have the same risk exposure and coverage. The insurers will avoid claim responsibilities to policies that they did not underwrite. In most cases, the issue is taken to court and the court will be the one to determine who pays for the insurance through a process called apportionment. It is important to note that concurrent insurance policy contracts should include clauses that outline the framework that it will provide apportioning coverage. For instance, the policy may only provide coverage in excess of the coverage provided by other policies.
