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Is It Possible to Claim Insurance from Two or More Companies?
December 1, 2020
For Some Claims, Yes - But Don't Commit Fraud
The short answer is actually, yes.
Insurance can be claimed from two (or more) insurance companies in a number of legitimate situations. In some cases, the practice is by design. In other situations, it is not, but can still be accommodated by some insurance contracts.
In no case, does the insurance contract or application anticipate that multiple policies be put in place without all parties knowledge and consent.
Attempting to profit from purchasing and claiming multiple insurance policies without notifying the carrier is likely a form of fraud and therefore a criminal act.
Insurance can be claimed from two (or more) insurance companies in a number of legitimate situations. In some cases, the practice is by design. In other situations, it is not, but can still be accommodated by some insurance contracts.
In no case, does the insurance contract or application anticipate that multiple policies be put in place without all parties knowledge and consent.
Attempting to profit from purchasing and claiming multiple insurance policies without notifying the carrier is likely a form of fraud and therefore a criminal act.
"Attempting to profit from purchasing and claiming multiple insurance policies without notifying the carrier is likely a form of fraud and therefore a criminal act."
Still… there are cases where multiple insurance policies can, and are, claimed for the benefit of all parties.
NON-INDEMNITY : Some insurance is written as a Non-Indemnity contract. Non-Indemnity means that there is no specific limit to a loss or compensation received by the insured. Life insurance is an example of Non-Indemnity insurance:
Caveat - When applying for life or accident insurance coverage, an application will ask if you have purchased, or are applying for other insurance coverage. Insurance companies will determine if the total amount of insurance applied for is reasonable for someone in your
INDEMNITY: Many types of insurance are written within the concept of indemnity . Indemnity means that the insurance is written to compensate for a specific amount or limit of loss. Examples include:
THIRD PARTY EXAMPLES:
Indemnity contracts are written to make the insured whole following a loss. An attempt to profit from a loss by secretly purchasing multiple policies and then attempting to claim from each is an act of fraud and a punishable criminal act.
On the other hand, there are legitimate situations where insurance may be spread among numerous carriers and still be in line with the contracts underlying principle of indemnity.
Have additional insurance questions? We LOVE to help. Please feel welcome to call us at 607-324-7500.
NON-INDEMNITY : Some insurance is written as a Non-Indemnity contract. Non-Indemnity means that there is no specific limit to a loss or compensation received by the insured. Life insurance is an example of Non-Indemnity insurance:
- Life Insurance & Accident Insurance - many people have life (or accident) insurance policies with more than one company. Policies will pay the face amount of insurance regardless of the amount provided by other carriers.
Caveat - When applying for life or accident insurance coverage, an application will ask if you have purchased, or are applying for other insurance coverage. Insurance companies will determine if the total amount of insurance applied for is reasonable for someone in your
- financial situation and may deny or limit coverage amounts accordingly.
INDEMNITY: Many types of insurance are written within the concept of indemnity . Indemnity means that the insurance is written to compensate for a specific amount or limit of loss. Examples include:
- Disability Insurance
- Caveat - Disability policies may be purchased and coverage stacked, however applications for this coverage request information about other policies purchased or applied for. Maximum amounts of disability coverage is typically set by the state of residence based on income level. Insurance companies will not knowingly issue coverage in excess of those limits.
- Property Insurance
- Caveat - Property coverage for smaller risks is typically not layered or stacked. Normally there would be no reason to have two separate policies to insure the average home. Personal property policies contain clauses to prevent multiple contracts written to “profit” from a loss. An example of such clause in an homeowners policy is found below:
- For larger commercial buildings, coverage for property insurance may be layered and written in coordination by numerous companies.
THIRD PARTY EXAMPLES:
- Casualty (Liability) Insurance
- Caveat
- Liability (third party) coverage can be written in layers shared by multiple companies. In the personal realm there can be primary/underlying insurance coverage written with an Umbrella or Excess liability limit written over the top.
In larger commercial accounts, companies may coordinate coverage by accepting the risk of different layers of coverage.
Indemnity contracts are written to make the insured whole following a loss. An attempt to profit from a loss by secretly purchasing multiple policies and then attempting to claim from each is an act of fraud and a punishable criminal act.
On the other hand, there are legitimate situations where insurance may be spread among numerous carriers and still be in line with the contracts underlying principle of indemnity.
Have additional insurance questions? We LOVE to help. Please feel welcome to call us at 607-324-7500.
This article may have been originally published at Quora.com.
To see Jeff's Quora.com profile click here.
“Am I covered if I drive someone else’s car?” Or, “Am I covered if someone else drives mine?”
Many don’t realize that the insurance industry is one of the country's most regulated business segments, especially in New York State. The New York State Department of Financial Services (NYS DFS) wields significant control over the insurance business and has a stated goal of protecting consumers.
Most property insurance companies offer Actual Cash Value or Replacement Cost settlement options. Typically, insurance companies will require that you insure the property to the settlement value you choose. If you select Actual Cash Value, the amount you may be required to insure the property for will be less than the corresponding Replacement Value.
In that spirit, the Ryan Agency is sponsoring a Stearns BBQ Dinner pickup at our office on 57 Broadway Mall in Hornell on September 12th from 3:00 PM to 4:30 PM.
Today, an individual’s credit history can play a more significant role than any one of those traditional factors. Good Credit Scores lead to a Positive Insurance score. A good Insurance Score greatly influences what someone will pay to insure their vehicles.
Insurance companies offer various discounts for which their policyholders may qualify.
Great Eight number Six (6) suggests taking a look at removing Comprehensive and Collision on Older Vehicles.
By reducing the number of claims in your insurance history, you can significantly affect your rates in the future.
Sometimes, this concept meets with resistance from policyholders. The thought of paying more in the event of a claim is off-putting to some. Even if that means I pay more for my insurance.
OK. Admittedly, this strategy doesn't benefit everyone, but it can be very beneficial for those it does. You may have unique home or auto insurance needs that prevent you from bundling with the same company. Alternatively… you might have a better rate without the bundle discount by splitting up your insurance between multiple carriers.
