Can I buy multiple policies to insure the same thing?
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Asked September 3, 2013
While having insurance of the same type by multiple insurance carriers is sometimes possible, it is not in your best interest to do so. In the case of car insurance, the newer policy will usually terminate the older policy automatically, and it might be a good idea to have different but similar types of health insurance, but most of the time you are creating more problems than you are solving.
The first problem that arises from having more than one insurance policy of the same type is that the insurers will attempt to "pass the buck." Both insurers will insist that the coverage should be the responsibility of the other carrier, and eventually the claim will be denied, leaving you responsible despite having more than enough insurance policies in place.
On the other hand, it might be a good idea to have multiple policies of different types. This might be an umbrella policy to cover excessive liability claims, but it will more commonly be a supplemental coverage, such as a rider in liability insurance or a secondary plan in health coverage. For example, your primary health plan may not offer dental care, so you could pick up a supplemental plan to add that, or to add coverage for your prescriptions. In liability, the rider might be to cover carrying passengers or valuable goods, but it might also be a supplemental coverage plan, such as for free towing or roadside assistance.
The key is to have all the insurance plans you need, but not any which directly overlap. In the event of overlapped coverage, all parties involved are subject to deny coverage on the basis that another company is covering the same loss. But having policies which fill in blanks in the other policy works out to your advantage, and it is important to make use of them where they will create a savings. If there is a situation where two policies do overlap, make sure that you name, in writing, a specific carrier for the items that overlap. You will have to negotiate with the parties involved to accomplish this.
Answered September 3, 2013 by Anonymous