What provision defines how a policy reacts when multiple insurance policies cover the same risk?

The provision that defines how a policy reacts when multiple insurance policies cover the same risk is known as "Other insurance." This term is crucial in insurance contracts because it outlines the rules and obligations of the insurers when more than one policy applies to a particular loss. This situation can lead to various scenarios regarding how claims are paid, such as pro-rata sharing, contribution by equal shares, or the application of primary and excess coverages.

When a policy includes an "Other insurance" clause, it specifies the handling of claims when two or more policies cover the same loss. This definition helps prevent the insured from benefiting from overlapping coverage, ensuring that the insurance companies coordinate payments effectively to fulfill their obligations without resulting in a financial advantage to the policyholder beyond what is necessary to make them whole.

The other options refer to related but distinct concepts. Nonconcurrency describes situations where different policies offer varying coverage terms, potentially leading to gaps in coverage. Primary and excess designates which policy pays first in the event of a claim, while the term "Valid insurance" is not a recognized provision but rather indicates the status of a policy being effective or in force. Therefore, "Other insurance" captures the specific provision that governs the scenario of multiple coverages and how they interrel