What happens if you
have two insurance policies covering the same
property? Insurance policies commonly have provisions
for this situation. Even though they are not
deductibles these provisions also serve to reduce
moral hazard.
Policy provisions to
multiple insurance policies covering the same
property:
1. call for the
policies to split a loss prorate (no sense in
buying more than one policy)
2. make one policy primary and the other excess
3. bar any contribution to a loss, and
4. with no provisions, both pay as in life insurance
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