What Is Concurrent Insurance?
Concurrent insurance is when there are two or more insurance policies that provide coverage for the same risks over the same period of time. Concurrent insurance is most often used when an insured person or business purchases policies in addition to a primary policy, with the additional policies providing excess coverage.
Key Takeaways
- Concurrent insurance is when two insurance policies are held to cover the same risks over the same time period.
- Concurrent insurance usually includes a primary policy, with the second policy meant to act as excess coverage.
- Insureds taking out concurrent policies generally do so when they believe a single policy cannot adequately protect against a particular peril.
- There can be issues with determining which insurer should cover losses, however, which can lead to having the court decide who pays.
- Concurrent causation relates to property insurance, saying that a loss should be covered when two perils, one covered and one not covered, cause damage.
How Concurrent Insurance Works
Concurrent insurance policies might be a good idea for an individual or business that believes that a particular peril poses a significant risk that cannot be effectively covered by a single policy. Purchasing one or more concurrent policies may be a prudent course of action if the cost is not prohibitive.
Determining which insurance policy pays for a covered loss can be difficult. Insurers will seek to shift claim responsibility to the policies that they did not underwrite, and they may take the issue to court. The courts are then responsible for determining who pays—a process called apportionment. Insurers will examine their own policy language, as well as that of the other policies, in order to make a case that the other policy is more specific to the covered loss.
Special Considerations
Insurance policy contracts often include clauses outlining the framework that it uses for apportioning coverage when risk is also covered by other policies. The three primary categories of apportionment are pro rata, excess, and no-liability. For example, the policy may say that it will only provide coverage in excess of the coverage provided by other policies. If this same claim is used in each policy, the general rule is that the language cancels each other out, and each insurer will be responsible for a proportional amount of coverage, called pro rata.
Due to the complexity of policy language, courts may provide a ranking of the order of policies when it comes to which policy is required to offer coverage and by how much. This order is determined by the language of each of the insurance contracts but may also use other factors such as the amount of premiums paid.
In the complex area of concurrent insurance claims, there are a few principles that are worth keeping in mind:
- Be honest and conservative in your internal assessments of your potential exposure. It does little good to be overly optimistic in assessing your liability risks.
- If you deselect a particular primary insurer in a concurrent insurance situation, it's important to preserve your rights by keeping the deselected insurer informed and up to date about litigation developments.
- Avoid surprises. Subject to appropriate confidentiality protections, invite a deselected insurer to participate in settlement discussions or at least keep the deselected insurer apprised of settlement discussions.
Concurrent Insurance vs. Concurrent Causation
Concurrent insurance is two insurance policies held at the same time. Meanwhile, concurrent causation is related to property insurance. This type of legal doctrine says that when damage is caused by two or more causes, where one is covered and another excluded, then the loss should be covered. Specifically, a loss caused by two perils, such as wind and flood, should be covered since it's generally impossible to distinguish which peril caused which damage.
FAQs
Key Takeaways
What is concurrent insurance coverage? ›
Concurrent insurance exists when two or more policies cover the same exposure and have the same policy period and type of coverage trigger.
What is an example of anti concurrent causation? ›
Let's say wind and surface water caused damage, and let's say the former is covered by the policy, but water damage is excluded. The anti-concurrent cause clause means that if the damage was really caused by both wind and water at the same time there is no coverage whatsoever.
What is meant by insurer concurrence? ›
A1: Awaiting insurer concurrence refers to the stage in an insurance claim process where the insurance company is reviewing and evaluating the claim submitted by the policyholder. The insurer assesses the claim's validity, coverage, and the extent of financial reimbursem*nt or benefits to be provided.
Can two insurance companies pay on the same claim? ›
Whenever you make a health insurance claim, your primary insurance plan will act as if you had no secondary plan and provide you with your benefits. Then your secondary insurance plan kicks in and covers the rest of the cost if it's covered and necessary.
Can you bill 2 insurances at the same time? ›
You can submit a claim to secondary insurance once you've billed the primary insurance and received payment (remittance). It's important to remember you can't bill both primary and secondary insurance at the same time.
Can you have two insurance providers at the same time? ›
The short answer is yes, you can, and many people do. According to the U.S. Census Bureau, about 43 million people have more than one medical insurance plan. That's about 13% of the population (of the rest, 79% had a single plan, and 8% had none).
What is the concurrency clause in insurance? ›
Concurrent insurance is two insurance policies held at the same time. Meanwhile, concurrent causation is related to property insurance. This type of legal doctrine says that when damage is caused by two or more causes, where one is covered and another excluded, then the loss should be covered.
What is a concurrent claim? ›
Concurrent Claim means a Claim that is reconsidered after an initial approval has been made that results in a reduction, termination or extension of a benefit.
What is a concurrent cause of damage? ›
Concurrent causation refers to identifying a loss that results from multiple causes; for instance, a windstorm that causes roof damage that also leads to rainwater damage, which in turn, causes mold.
Nonconcurrency is the condition created by two or more policies covering the same loss exposure that do not have identical inception and expiration dates.
What is it called when you have three insurance policies? ›
Term insurance laddering strategies are common and involve the use of multiple policies, each with different durations. There are a few companies that will allow you to buy multiple policies on one application, making the process easier to complete.
What happens if I have two homeowners insurance policies? ›
You cannot submit a claim and get the full amount from both insurance companies. This would be considered fraud. Instead, the insurance companies will typically split a claim between them, each paying a portion of it. In this case, it's better to purchase one expensive home insurance and cover all your bases.
What is double dipping in insurance? ›
Insurance claim double dipping involves collecting benefits from two or more insurance companies for the same loss. In this scam, fraudsters make identical claims for the same incident at multiple insurance companies to increase their payout.
What determines which insurance is primary? ›
To determine which plan is primary, which means the insurer pays for covered services first according to the benefits provided by the plan. The other insurer pays secondary, which means it pays the remaining unpaid balance according to the benefits provided by its plan.
What happens if an insured has coverage through two different insurance companies? ›
Your two insurance companies will need to agree with one another about who will cover what part of the claim, which can dramatically extend the amount of time it takes for you to receive a settlement. Your premium costs from both insurers will rise after a claim.
What is the meaning of concurrent claim? ›
Concurrent Claim means a Claim that is reconsidered after an initial approval has been made that results in a reduction, termination or extension of a benefit.
What is the concurrent benefit clause? ›
A concurrent disability occurs when there is more than one injury or illness. Though there is more than one injury/illness causing disability, the concurrent disability benefits are paid as if there is only one injury or illness; the insured will be considered to have one disability.
What is it called when two insurance plans work together for coverage of the same person? ›
Secondary insurance is when someone is covered under two health plans; one plan will be designated as the primary health insurance plan and the other will be the secondary insurance.
Is there insurance that covers multiple states? ›
The plans are sold through the Marketplace under a contract between the U.S. Office of Personnel Management (OPM) and insurance companies. The name “Multi-State Plan” means only that OPM operates the program in multiple states. Some Multi-State Plans offer in-network coverage nationally or in multiple states.
