You're absolutely correct, you'll have both insurance companies trying to avoid paying out.
My point, although murky, was that more policies do not equal a higher payout...except, of course...life.
Quote:
Originally Posted by drcoastline
Rusty,
That is not correct. It is true you can pay as many premiums as you like but. If you have two valid insurance policies running concurrently. That does not mean one will pay and the other is off the hook or that you would get paid twice. Double indemnity.
For what ever reason lets say there are two policies in effect.
One with Haggerty @ $500 annual premium $24K value, issued 1/1.
Another with American Modern @ $500.00 premium $24K value, issued 6/1.
Both premiums are paid in full.
The car gets totaled 9/1. At the time of the loss the insured realizes he has two policies in effect and submits a claim to both carriers.
1. The insured will not receive $48K. That is double indemnity and is fraud by the insured if he accepts both.
2. Policy #1. Issued on 1/1 may be more responsible for the loss in essence 75% as the policy was in force for 75% of its term. Policy #2 may only be liable for 25% of the loss.
3. It could be deemed both policies respond and pay 50% of the loss each.
As you can see Policy #1 is going to push for scenario #3 and Policy #2 is going to push for scenario #2.
Neither carrier would return any premium to the insured. So the insured ended up in the end paying $1,000.00 in premium vs. $500.00.
Personally, I have never seen two policies in standard auto as the car own is almost always responsible to obtain coverage and make payment on their own. But I have seen it occur in Homeowners where the premium may be paid by a mortgage company. The company pays late. The insured gets a cancellation notice (not realizing the mortgage company is responsible to pay) and goes out buys their own policy. Now you have two policies in effect two agents, two carriers, non concurrent effective dates.
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