What is the purpose of the "other insurance" clause in a Personal Auto Policy?

The "other insurance" clause in a Personal Auto Policy is crucial for coordinating claims when there are multiple insurance policies that could potentially respond to a loss. This clause outlines how the insurance company will handle the situation if the insured has more than one policy providing coverage for the same loss.

In scenarios where multiple policies may provide coverage, the "other insurance" clause establishes which policy is primary and which is secondary. This helps to prevent the insured from receiving more than their actual loss, which is known as "double recovery." For example, if a vehicle is damaged and both a personal auto policy and a garage policy could apply, the clause determines which policy pays first and how any subsequent claims are handled.

By incorporating this clause, the insurance policies maintain order and fairness in the claim settlement process, ensuring that the insured receives compensation without exceeding the total value of the loss incurred.