What provision in an insurance policy defines how it responds if multiple policies cover the same risk?

The provision in an insurance policy that defines how it responds if multiple policies cover the same risk is referred to as "other insurance." This stipulation outlines how different insurance policies may coordinate their coverage in the event of a claim, especially when multiple policies apply to the same loss. "Other insurance" clauses help determine which policy is responsible for covering a loss first and how the costs will be shared among the insurers, ensuring that insured individuals do not receive more than the actual loss or benefit from multiple payouts.

By clarifying how the coverage will be allocated, this provision prevents issues of overlapping coverage where one could collect payments from multiple insurers for the same loss. It is particularly relevant in situations where individuals have multiple insurance policies with different companies that may cover similar risks, allowing for a fair and structured approach to claims handling.

Understanding this concept is crucial for ensuring that policyholders are aware of how their insurance claims will be evaluated in scenarios involving multiple policies, helping to mitigate disputes or confusion at the time of a loss.