Overlapping Insurance

What Does Overlapping Insurance Mean?

Overlapping insurance occurs when a party holds multiple insurance policies with the same coverage for the same risk. This can happen when different types of insurance, such as property, liability, or other policies, cover the same peril. In such cases, the “other insurance clause” comes into effect, determining which policy will cover the loss.

Insuranceopedia Explains Overlapping Insurance

Overlapping insurance can benefit both the insurer and the policyholder. If a claim is filed for a peril covered by multiple policies, the payment may be split between the insurers, or one insurer could bear the full responsibility. The policyholder benefits from having multiple sources of coverage for the same peril, which can be particularly useful if one insurer were to go bankrupt, for example.