Other Insurance and Loss Settlement on Homeowners Policies

Q

We are unsure how to settle a claim where two homeowners policies apply, and would like your input.

Here is the situation: Our insured's daughter moved back to live with her parents, bringing her personal property with her and storing it in her parents' home. She still has a homeowners policy in force. There was a fire at her parents' house, and her property was destroyed. As we read the “other insurance” provision in both the policies, we share pro-rate with the other company, but the other policy has the 10% limit for personal property located at an insured's residence other than the “residence premises.”

California Subscriber

A

The “other insurance” provision makes reference to the “total amount of insurance covering the loss.” In this instance, the total amount is 110%—10% from the daughter's insurance and 100% from the parents' insurance. Of course, the daughter cannot collect 110%, since this would allow her to benefit from the loss. So, each insurer pays their particular portion of the 110%—the other insurer pays 1/11, and you, 10/11.

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