When automobile insurance companies know that you have two covers for one particular loss, they would work out who should pay. Generally, one policy would be the primary and the other secondary. So, the latter would only be called to make compensations when the former is exhausted. This would be the case when the damages are larger than the coverage you have on one. If the first meets all the obligations the case would be closed.
Can I Claim from Two Insurance Policies?
Yes, you may be able to seek compensation from separate policies for the same incident but not for the same loss. Consider a situation where a car is broken into and a laptop is stolen from within. Comprehensive auto coverage would handle the destructions to the automobile and home content package may settle the laptop cost. On the contrary, pair of auto carriers wouldn’t pay for the same thing twice.
Again, if you received full settlement for a stolen vehicle and later it is found it would now be the property of the company. You must let them know so that they can go and take it from the compound.
Can I Have 2 Car Insurance Policies at the Same Time?
The answer is yes but it may be waste of money. So, there is not much point in insuring a risk over and over again. The logic supports this practice as well. Coverage is there to compensate the loss suffered and try to make sure that people are not worse off than before the incident.
Similarly, policyholders cannot be better off. Otherwise, there would be issues with moral hazard to deal with. People would pay the thieves to steal their cars so that they can get paid more than once. That is the logic behind not allowing people to double dip. It is about repairing or replacing the things, as they were, nothing more or less.
Is It Illegal to Get Compensated Twice for the Same Damage?
This may happen in various different scenarios and therefore they should be looked at individual bases and determine their legality. However, a general answer would be yes, as you would be allowed only once in majority of circumstances. According to reports from the North Carolina Department of Insurance (NCDOI) a woman was arrested after it is found that she received money twice for one incident.
The lady driver in question had her car run into in a car park. Her carrier sent her $1,200 dollars. She also managed to negotiate another $600 settlement with the guy who caused the fender bender. She was arrested when they found out double dipping auto insurance claim.
According to the experts double dipping is illegal in North Carolina. According to one lawyer, the vehicle insurer has settled the claims in full and money received towards the recovery in relation to that accident now should go to them. She has no further right over the reimbursement from third parties who caused the damages. And she should have returned any excess amount back.
According to the NCDOI press release the charges were brought for “obtaining property by false pretense”. The North Carolina law says that anyone who takes money with false pretense and “intend to cheat or defraud any person of such money” will be guilty of felony.
Although no further details were released as to how the driver in question was found out and arrested it is likely that they found out in the process of subrogation. When you go through your own provider for the damages caused by others they may handle it quickly to keep you happy.
Then, they would go after the third parties to get reimbursed for that expenditure. The end result should be that the damages are paid in full and also at fault parties (or their carriers) should pick up the bill at the end. It is generally a lengthy process but they should not be allowed to get away.
The take out from this story is that when you applied to your own carrier for compensation you cannot then pocket the money coming from at fault third parties. You have to let them know of any settlement offer and they decide what to do with it. If you did you need to tell them how much you received and under what conditions. Otherwise you may go to jail.