Concurrent Insurance
What Does Concurrent Insurance Mean?
Concurrent insurance refers to two or more policies that cover the same exposure or risk and have the same policy period and coverage triggers. This approach is often utilized when the insured entity—whether an individual or a business—purchases additional policies alongside the primary policy to provide excess coverage. This strategy is particularly beneficial for those who believe they are at risk from perils that cannot be adequately covered by a single policy. Buying concurrent policies can be a prudent decision, provided that the cost of such insurance is not prohibitive.
Insuranceopedia Explains Concurrent Insurance
The challenge with concurrent insurance is that it can be difficult to determine which insurance policy will pay for the losses, as both policies cover the same risk exposure and have similar coverage. Insurers may avoid responsibility for claims on policies they did not underwrite. In most cases, the issue is brought to court, where the judge determines which insurer is responsible for payment through a process called apportionment.
It is important to note that concurrent insurance policy contracts should include clauses outlining the framework for apportioning coverage. For instance, a policy may stipulate that it only provides coverage over the coverage offered by other policies.
