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Insurance Law/using more insurance companies...


hi there Denise, thanks for reading this. I just have a quick straight forward question I hope. now I live in the uk but even with us laws I could get an idea I suppose. is it ok to take the same insurance policy for eg. public liability insurance for the same cause or business from 2 or more different insurance companies? this is to reduce the burden for a single insurance company like use different insurance companies in turns to compensate for any claims. I look forward to your reply hopefully, thanks.

Hi Tim-

Here in the US, it's not always a good thing.  I'll give an example.  Say you have your Homeowners insurance with one company, and a Personal Liability Umbrella policy with another company.  Homeowners are standardized for the most part, while Umbrella policies are not.  If you purchase the Umbrella policy from the same company, you are assured that there will not be any hidden gaps in coverage between the Homeowners and Umbrella, that it will "drop down" to protect to provide the best coverage.

In the case of a large business risk, reinsurance is generally the vehicle used to transfer the risk from an insurance company to another insurance entity, exchanging premium for a percentage of the risk exposure.  

The best way to approach such a situation would be, in my opinion, to deal with a very large insurance brokerage firm, that writes with a number of companies, so that they can find the best way to provide the package of coverage needed.  They would have the better relationship with the underwriters to work out the best arrangement with insurance carriers.  It works much better, I would think, if both companies involved knew of the coverage with the other, so there is a firm understanding of who picks up coverage where, and to what limit.

Hope this helps. :)


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I am a licensed Property/Casualty agent in the state of Wisconsin, a Certified Insurance Counselor and a Certified Insurance Service Representive, with a 15+ year background in personal insurance underwriting. I am currently working in the Homeowners and Auto field, and was licensed in Life and Health insurance years ago. I can provide input if you will give me a "one paragraph what`s the story", however depending on the situation, do note that as policy forms and endorsements vary by the state, the information may be general and educational in nature.


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