Tale of two auto policies: Determining the primary coverage

Coverage Q&A:At times, two insurance policies will be called on to provide coverage for the same loss.

How does one determine which of two policies is the primary coverage? (Photo: Shutterstock)

Every claim is different, and some insurance policies can be difficult to interpret for unique situations. FC&S Expert Coverage Interpretation, the recognized authority on insurance coverage interpretation and analysis for the P&C industry, makes it simple to find credible answers to your complicated coverage questions. Analysis brought to you by our FC&S experts. 

Editor’s Note: What happens if a driver has two different auto policies?

Question: My insured has two auto policies providing liability coverage. The “Other Insurance” clause suggests one policy is primary over the other.

The driver of a vehicle, who was not the owner but had permission to operate the auto, caused an accident. The driver has her own personal auto policy. I need to determine if the driver’s policy is excess or if one policy cancels out the other? Can you locate any favorable cases for the driver either way?

— Illinois Subscriber 

Analysis: Every now and again, two policies will be called on to provide coverage for the same loss. Policy writers have contemplated this, and language is built into each policy that outlines how the policy will act if there is also coverage from another policy.

In some circumstances, the policy will be primary, but in other circumstances, the policy will act as an excess policy. Or the policies will work together to provide coverage for the loss, with each policy paying a proportionate share of the loss based on its proportion of coverage. It is important to thoroughly read both policies and review the “Other Insurance” clause in each.

Answer: To learn the answer to this week’s coverage Q&A, please log into your FC&S Expert Coverage Interpretation account.

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