Ace Insurance Company and Acme Insurance Company each insure the same building for the same amount. Both policies contain a pro rata other insurance clause. In the event of a partial loss, how much of the loss will Acme pay?
Ace Insurance Company and Acme Insurance Company each insure the same building for the same amount. Both policies contain a pro rata other insurance clause. In the event of a partial loss, how much of the loss will Acme pay?
A) One-third, because the insured is the third party to the contract and must bear a proportionate share of the loss.
B) None, because second-named insurers always provide excess coverage.
C) 0.5.
D) 100%, although Acme will have the right to subrogate the claim against Ace Insurance Company
Answer: C
Comments
Post a Comment