Definition - What does Double Recovery mean?
Double recovery is a legal offense in which an insured makes several claims from different insurers for the same loss. This violates a core principle in insurance that no one should profit from their policies.
Insuranceopedia explains Double Recovery
Insurance provides protection against losses. It is, therefore, not intended to earn policyholders a profit the way they would if they were trading in financial instruments. This is the reason double recovery is illegal. Insurers even make it a point to include a double indemnity clause in some policies (like property insurance contracts) to prevent the insured from making such a move during the claims period.
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