What would happen if something were insured twice?
This is purely hypothetical and I’m not sure how it would work.
Let’s say that I own a house and I insured the building and its contents. Then I contacted another insurance company and I insured the building and contents AGAIN.
I now own two policies, both of which guarantee to replace the contents and the value of property if a set of conditions are met. A common example would be an accidental fire.
Oops, the house burns down. Does this mean I could then claim on both policies and I’d end up with both the money to repair/replace property AND that amount of money again?
My ‘common sense radar’ tells me that this is ridiculous and clearly wouldn’t work but I can’t prove that logically.
So here’s the question. What would happen if the conditions were met on two insurance policies on the same thing?
I don’t know about all insurance policies but my homowner’s policy has specific langauage regarding this.
For example, “if covered property is insured under more than one policy issued by us or another insurer and different deductibles apply under such policies then the deductible applicable under all such policies used to determine the total loss shall be the highest amount stated in any one of the policies.” They have this covered, so to speak.
I also carry flood insurance. That policy mentions that if there is other insurance then they will determine how the two deductibles mesh and will only pay for a proportion of the total loss.
Except for Life Insurance [as one cannot put a value to life]; every insurance is that an insurance to compensate the loss. There is no additional gain to be made.
So in your case you will only get the value of the property and nothing additional. Depending on the jurisdictions there are some variations;