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Coordination of Benefits (COB)

Last updated: November 7, 2017

What Does Coordination of Benefits (COB) Mean?

Coordination of Benefits (COB) refers to the rules that determine the the primary plan and the secondary plan when an insured has two or more policies covering the same risks. It prevents insurers from overpaying for claims.

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Insuranceopedia Explains Coordination of Benefits (COB)

Coordination of Benefits ensures that a person with two or more insurance policies that cover the same risks does not use these benefits to turn a profit. Insurance coverage is meant to remedy a loss, but if an insured were to, say, get the same medical procedure paid for twice or receive two compensations in full for an auto accident, the amount they received would be in excess of that remedy. Essentially, one of the insurance companies would cover the loss while the other would unwittingly pay the insured a profit.

One of the many COB rules is that if a person is covered as a policyholder for a given risk and is, at the same time, covered for the same risk as a dependent on another person's insurance policy, the first policy is considered their primary plan and the second only pays for what the first cannot.

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