When two property policies are active for the same property, how is a claim payment applied under those policies?

When two property policies are in effect for the same property, a claim payment is typically applied using the pro rata method. This approach allocates the payment based on the ratio of coverage provided by each policy relative to the total coverage available.

For example, if one policy covers 70% of the insured value and the second covers 30%, then during the settlement of a claim, the first policy would pay 70% of the claim amount, while the second policy would cover the remaining 30%. This method ensures that no single policy is penalized for having been issued alongside another and allows for fair distribution of the claim payment according to each policy's involvement.

Alternative methods like contribution by equal shares would require each policy to pay an equal portion of the claim regardless of their coverage limits, which is not the standard practice for coordinating benefits in property insurance. Concurrently and nonconcurrently could refer to the timing of the policies in effect but do not accurately describe how claims would be settled under the policies. Pro rata is the best answer because it reflects the industry-standard approach in managing overlapping coverage.