What is the purpose of the "other insurance" clause in an insurance policy?

The purpose of the "other insurance" clause in an insurance policy is to explain how multiple policies will coordinate coverage for the same loss. This clause is vital when an individual holds more than one insurance policy that may cover the same risk or loss. The clause typically outlines how claims will be settled in the event of overlapping coverage, indicating whether the policies will share costs proportionally or if one policy will serve as primary while another is secondary. Understanding this coordination is essential, as it helps policyholders know how to file claims effectively and understand their potential financial responsibilities in the event of a loss. This is important in ensuring that the insured receives proper compensation without receiving an excessive payout beyond their total loss, which is often referred to as "double recovery."