The short answer to this question is, “Yes.” While this is certainly not common, you might find yourself in a position where you can validly put out a claim to different insurance companies. This article will be briefly exploring how such scenarios tend to come about and safe practices you can employ. Insurance policies are no joke or a cheap affair. Depending on what policy you choose to take out on your valued person/property, you would be required to pay a premium, and when you want to cash in on your policy, you’d mostly need to pay a deductible as well. If you were to take the same insurance policy out from two different companies on the same piece of property, you’d technically have to pay two premiums and deductibles as well. From a purely economic point of view, the above isn’t very profitable for you as the insured.
This is, of course, setting aside the fact that doing such can be considered highly illegal under certain circumstances. Taking out the same insurance policy from two different insurers on the same property can be regarded as a fraudulent act, especially if you haven’t duly informed both parties. If that is the case, how is it possible a person can end up filing valid claims to two different insurance companies? The answer might surprise you.
If the First Insurance Company Doesn’t Extend a Specific Coverage or Add-on…
Yes. You can wound up taking out the same insurance package on a property if the first insurer denies you certain coverage you desire. For example, imagine you find a package you like, but for some reason, they refuse to extend business insurance to cover the vehicle’s use by the other drivers you’ve named in the policy. If getting business insurance to cover the other drivers in your household is very important to you, you can opt to take that insurance and then look for another insurance company that’ll specifically offer you that coverage. When an accident eventually occurs, and it’s time to file a claim, you are consequently entitled to submitting claims to both companies and then have them sort out who’ll pay what.
Does Filing Insurance Claims to Different Insurance Companies mean You’ll Get Paid Twice?
Yes and No. You have the liberty of filing claims to as many insurance companies as are applicable in your case. However, whether the insurers will pay, and what they’ll pay is contingent on certain factors.
All Insurance Companies Will Pay If:
You hold certain types of insurance policies. For specific insurance policies, like life insurance, for example, no matter how many insurers you take out the policy with, the moment you pass on, they’ll pay in full.
All Insurance Companies Won’t Pay, or Will Pay a Specific Percentage If:
You’re not covered or if it’s an indemnity policy. Keep in mind that outside certain types of insurance policies, insurance packages exist primarily for compensation, not for turning a profit. What this means for your filed claims is that one insurer will either pay out in full (if you’re covered) while the other doesn’t or, both insurers pay certain percentages of the payout together or at different points in time.
Receiving payout from multiple claims is ultimately dependent on the type of insurance policy you took out on your person or property. Also, regardless of how many claims you file, you will only receive a payout from insurers you are covered with. The best way to know what to expect is to go through your policy thoroughly.