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

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