Deductibles when Two Policies Involved
May 29, 2018
When prorating damages under a HO policy due to the “other” insurance clause, is the loss still subject to a deductible? If so, should the deductible be prorated as well?
Louisiana Subscriber
The policy language stipulates that the deductible applies unless otherwise noted; there is nothing in the other insurance section that indicates that the deductible would not apply. However, both policies are combining to provide coverage for one loss. While I was unable to find a case that fit this circumstance, the reasonable thing to do to be fair to the insured is to split the deductible between the two carriers. If one carrier's proportion of the loss is 60 percent, then 60 percent of the combined deductibles should be applied to the insured.
It is not fair to the insured to apply both deductibles for one loss, and since the carriers are combining in order to provide coverage, they should also combine and split the deductibles.
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