What is the purpose of the Other Insurance Clause?

The Other Insurance Clause serves to establish how claims will be handled when multiple insurance policies cover the same loss. Its primary function is to outline a method for sharing the loss among these policies, typically on a prorated basis. This means that if the insured has multiple policies covering the same risk, the payout for any claim will be distributed proportionally based on the coverage limits and premiums of each policy involved. This helps prevent the insured from profiting from having multiple coverages for the same risk, as the goal is not to allow the insured to receive more than the actual loss incurred.

In this context, one can understand why options suggesting an increase in premiums, providing multiple coverage options, or guaranteeing payment from at least one policy do not align with the main intent of the Other Insurance Clause. Such provisions are not aimed at adjusting costs or ensuring accessibility to claims, but rather at accurately compensating for losses while keeping the insurance process fair and equitable among different insurers.