Other Insurance Clause

What Does Other Insurance Clause Mean?

An “other insurance” clause is a provision included in insurance policy contracts that outlines the extent of coverage when the insured has another policy covering the same risk. Depending on the terms of the clause, the insurers may share the coverage, or one policy may provide sufficient coverage on its own.

Insuranceopedia Explains Other Insurance Clause

The “other insurance” clause serves as protection against overinsurance, a situation where multiple insurers pay out claims for the same loss, potentially allowing the insured to profit from their insurance policies.

Typically, one policy is designated as the primary insurance. This primary policy is the first to be activated when the policyholder suffers an insured loss. If the primary policy is exhausted and does not cover the full loss, other policies will provide additional coverage for the remaining amount.

Policyholders are advised to read the “other insurance” clause carefully, as it may specify that the policy will not provide coverage if another policy already covers the same risk.