What Does Your Policy State Regarding: Concurrent Damages & Concurrent Policies?

Concurrent is defined as: “Having the same authority; acting in conjunction; agreeing in the same act; contributing to the same event; contemporaneous.”¹ Now, within the insurance universe, conflict may exist when an insurer has concurrent damages and/or concurrent policies. For example, policies may include an exclusion clause such as:

EXCLUSIONS

1. We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damages excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss.²

In other words, claims for loss or damages that are covered under an insurer’s policy that are concurrent with loss or damages excluded under a clause will, therefore, be denied based on exclusion. However, when an insurer has more than one policy that covers the same loss or damage the policies could include clauses that limit liability or coverage when other insurance may cover the same loss.³ This should not affect the insurer’s rights because it is valid to have more than one insurance policy for the same risks or perils – the coverage will be determined by the clauses and limitations in each policy.⁴

There are a few clauses seen frequently related to concurrent policies, such as: Excess Clause and Pro Rata Clause. The Excess Clause converts a primary coverage into excess when another primary policy covers the same risk or peril. When two or more insureds have an Excess Clause in their insurance contract, it is necessary to interpret and determine if they are compatible. It has been determined that when they are compatible, each will go into effect and each insurance company will determine their responsibility for the damages. If insurance policies are incompatible the responsibility will then be Pro Rata.⁵

A Pro Rata Clause applies when the insured has another insurance policy that covers the same risk; the insurer will only respond for the portion of the loss that corresponds to the limit of responsibility per the policy in relation to the total of responsibility limits applicable to all insurance that covers the same damage.⁶

If you have or are considering having more than one policy to cover the same risks or perils, it is important to have a copy of each complete policy and verify if any of these types of exclusions and clauses would apply.
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¹ https://thelawdictionary.org/concurrent/, Retrieved July 15, 2020.
² Diaz Rodriguez v. Puerto Rican Am. Ins. Co. (PRAICO), No. JDP1999-0424, 2003 WL 21043539, at *1 (P.R. Cir. Jan. 31, 2003).
³ Monteagudo Perez V. ELA, 172 DPR 12 (2007).
⁴ Id.
⁵ Id.
⁶ Id.