What is Double insurance?
When the same subject matter is insured with two or more insurers to cover the same risks, it is called double insurance. It is a case of over insurance.
for eg: A person insure his building for 1,00,000 with two insurance companies. If there is total loss he will not get rs 1,00,000 from each insurance company
Whenever there is double insurance, the principal of contribution becomes applicable. According to this principal, in the event of loss the insured will get only the actual amount of loss. In other words, each insurance company will contribute only a proportionate amount of actual loss.
