What is Meant by Insurer Concurrence? A Comprehensive Guide

Insurer concurrence refers to a situation where two or more insurance policies provide coverage for the same risk during the same time period. It is a common practice for policyholders to take out multiple policies to get additional protection beyond their primary coverage. However, having overlapping policies can lead to disputes over which insurer is responsible for paying claims. This article provides a detailed overview of insurer concurrence, its benefits and drawbacks, and how claims get settled when there are concurrent insurance policies.

What is Insurer Concurrence?

Insurer concurrence, also known as concurrent insurance, happens when an individual or business buys two or more insurance policies that cover the same risk for the same time period.

For example, a homeowner may have a primary home insurance policy as well as a supplemental policy that provides additional coverage for certain perils like earthquakes or floods. Both policies would be in effect at the same time, meaning there is concurrent coverage.

Concurrent insurance also occurs when multiple policies are taken out to cover the same commercial risk. A business may have a general liability policy along with an umbrella policy that provides extra liability limits above the primary policy.

The key elements of insurer concurrence are:

• Two or more insurance policies held by the same policyholder
• Policies cover the same risk exposure
• Policies have overlapping policy periods
• Policies have similar coverage triggers

Concurrent insurance is different from consecutive insurance where policies cover the same risk but for different time periods. With consecutive insurance, a new policy simply picks up when the prior policy expires.

Why Get Concurrent Insurance?

There are a few reasons why policyholders intentionally take out concurrent insurance:

• Extra protection – Primary policies may have coverage gaps or limitations that leave the policyholder exposed. Additional concurring policies provide extra protection.

• Higher limits – Umbrella or excess liability policies add higher limits above a primary policy to ensure adequate coverage for severe losses.

• Specific perils – Supplemental policies may cover risks excluded under the primary policy, like earthquakes or floods.

• Reinsurance – Insurers may use concurrent reinsurance polices to limit their own risk exposure.

• Duplication – Sometimes concurrence happens accidentally when policyholders forget they already have coverage.

Essentially, policyholders aim to eliminate coverage gaps and get greater peace of mind through redundant insurance policies. It can be a smart strategy if the additional premiums are affordable.

Pros and Cons of Concurrent Insurance

Before getting concurrent coverage, it’s important to weigh the potential benefits against the possible downsides:

Pros

• Broader protection by filling gaps in primary policies
• Higher coverage limits for severe losses
• Specialized coverage for excluded perils
• Added financial security

Cons

• Increased premium costs
• Overlapping coverage is often unnecessary
• Potential coverage disputes between insurers
• Added complexity when filing claims

While redundant coverage seems attractive, it can be an expensive form of overinsurance. Policyholders should carefully analyze their risks and existing policies first. Concurrent coverage may not be cost effective if the primary policy already meets their needs.

How Claims Get Paid with Concurrent Coverage

The major complication with concurrent insurance is coordinating benefits when the policyholder has a covered loss. Which policy pays first, and which pays second? Who covers what portion of the claim?

Insurers actively avoid paying for losses covered under other concurrent policies. This often leads to disputes that must get resolved in court. To determine which insurer owes what, the court applies a principle called apportionment.

Apportionment allocates the covered loss between insurers based on each policy’s language and the specific circumstances of the claim. There are three main methods of apportionment used:

• Pro rata – Each insurer pays an equal, proportional share of the loss.
• Excess – One policy pays first up to its limits, then the next policy pays.
• No liability – Based on policy language, one insurer has no liability for a particular loss.

Many policies have “other insurance” clauses designed to make that policy excess over other concurrent coverage. When excess clauses conflict, courts may disregard them and apply pro rata apportionment.

But the exact process depends on the specific policies involved and varies by state. It often requires judicial intervention when insurers cannot agree on allocation.

Key Things to Know About Insurer Concurrence

Here are some other important facts about concurrent insurance policies:

• Disclosing other insurance is critical when applying for coverage. Failing to do so can void coverage.

• Scheduling all policies on one form helps avoid accidental coverage overlaps.

• Stacking policy limits of concurrent coverage is generally prohibited.

• Concurrent claims should be reported promptly to all involved insurers.

• Courts ultimately decide which insurers pay if there are coverage disputes.

• The primary insurer usually defends claims, not excess or umbrella insurers.

• Premiums are not refunded for redundant coverage after a loss occurs.

• Insurers have a right to seek reimbursement from each other via subrogation.

Understanding how concurrence works enables smarter insurance decisions and faster claims resolution.

Examples of Concurrent Coverage Disputes

Complex claims often arise when property or liability losses implicate multiple concurrent insurance policies. Here are some examples:

• A commercial building is damaged by both wind and flood. The property policy covers wind but excludes flood. The owner has separate flood insurance. The insurers dispute how to allocate the loss.

• An auto accident injures another driver. The at-fault driver has two policies – a primary auto liability policy and a personal umbrella policy. The insurers argue over which policy should pay first.

• A company is sued for $3 million over a copyright claim. They have a $1 million CGL policy and a $5 million umbrella policy. The two insurers disagree on how the liability limits should stack.

In each case, the concurrent policies provide coverage but the insurers resist paying unless forced to by a court through apportionment proceedings.

How Policyholders Can Avoid Concurrent Coverage Issues

To prevent problems with overlapping policies, individuals and businesses should:

• Review all policies each year at renewal to look for redundant coverage.

• Discuss any concerns about gaps in coverage with their agents/brokers.

• Ask insurers to schedule all policies on one declaration page.

• Understand “other insurance” clauses in policies and how they interact.

• Report any covered loss promptly to all potentially applicable policies.

• Maintain clear records of all communications with insurers.

• Seek legal advice if there are disputes between insurers over apportionment.

Conclusion

Insurer concurrence provides policyholders with extra protection but can also create claims handling complications when multiple policies apply. By taking a proactive approach, utilizing insurance advisors, and following sound claim practices, insured parties can often avoid or resolve concurrent coverage disputes efficiently.

While overlap can be beneficial in some cases, individuals and businesses should still aim to streamline their insurance programs by periodically evaluating the need for concurring policies. Working with experienced agents and brokers is key to designing an optimal insurance portfolio that provides sufficient coverage without excessive redundancy.