Double insurance - legallity

Babbler

I have just been informed that having double insurance (i.e. covering the same item by 2 different insurance companies) is illigal. Is this correct and if so why?

E.G. If my travel insurance covers my car while Im away for having its window broken/etc would this be illigal? It also covers my home while Im away...

Porker

policies have a clause to prevent you claiming for the same thing from two compaines. the illegal part is 'betterment' - as a result of a claim you shouldnt be in a better finaincial position than you were before. this means that if the same event is insured by 2 policies they would each pay out a proportion, rather than both paying out the same ammount. the only type of policy where you can practically be insured more that once is life insurance.
HTH.

telly-addict

Porker wrote:

policies have a clause to prevent you claiming for the same thing from two compaines. the illegal part is 'betterment' - as a result of a claim you shouldnt be in a better finaincial position than you were before. this means that if the same event is insured by 2 policies they would each pay out a proportion, rather than both paying out the same ammount.

Agree with previous posters that dual insurance in itself is not illegal.

The most common example of dual insurance is the loss of or damage to personal possessions while away on holiday - can be covered under both your travel and home (where you have taken out separate personal possessions cover) insurances. You are entitled to put in a claim under each policy, but each insurer's contribution to the settlement should not exceed the value of the lost / damaged item. You would need to inform each insurer that you have separate insurance that might cover the item.

Putting you in the same position as you were before the loss or damage is the principle of indemnity. This is a fundamental insurance concept.

Putting yourself in a better financial position is not the illegal part. For example, most household policies will offer new for old cover - so a damaged television is replaced by a brand new television of the same specification. The illegal part is the fraud in getting yourself into that position!