Multiple insurance policies for the same claim: why poor coordination reduces compensation

When a complex claim occurs, many people assume the problem is that the insurance does not cover the loss. In reality, the real issue is often that several insurance policies are involved and are not properly coordinated.

Community insurance, landlord insurance, tenant insurance, private insurance and the Insurance Compensation Consortium.
When multiple policies apply, it is common that:

• each insurer reviews only its own policy
• gaps in coverage appear
• underinsurance is applied incorrectly
• the final compensation is significantly lower than the real damage

In these situations, understanding how policies interact is as important as the damage itself.

When multiple policies apply to the same loss

It is more common than expected to find claims involving two or more policies, such as:

• community insurance + private dwelling insurance
• community insurance + commercial premises
• private insurance + insurance compensation schemes
• landlord policy + tenant policy

If the claim is not structured correctly from the start, important damage items may never be claimed.

Community insurance and private policies

One of the most frequent situations occurs when a loss affects:

• common elements
• and an individual dwelling or commercial unit

For example:

• water damage from common pipes affecting a ground-floor unit
• fires impacting both the building structure and private contents
• flooding in communal garages and storage rooms

Without a clear analysis of responsibilities and coverage, compensation is often reduced unnecessarily.

When community insurance offsets weaknesses in private policies

In some cases, the private policy:

• does not exist
• is outdated
• lacks essential coverage

Although it is not automatic, there are situations where community insurance has successfully covered damages when the origin was clearly communal and the building structure was insured under the community policy.

Private insurance and insurance compensation schemes

In extraordinary events such as floods or severe storms, two different entities may intervene:

• private insurers
• insurance compensation schemes

A common mistake is assuming that:

• everything is covered by the compensation scheme
• or that private insurance no longer applies

In reality, each covers different types of damage. Poor coordination often leads to incomplete compensation.

Impact on underinsurance and proportional rule

When several policies apply, it is common to find:

• insured values not properly combined
• tolerance thresholds ignored
• proportional rule incorrectly applied

Proper coordination can significantly reduce or eliminate underinsurance penalties.

Landlord policy and tenant policy: coordination, not duplication

Another common scenario involves both landlord and tenant insurance policies.

A key clarification: the same damage is not paid twice, but different parts of the loss may be covered by different policies.

For example:

• landlords usually insure the building
• tenants insure contents, improvements or liability

In some cases, when the tenant undertakes repairs, a right of subrogation or assignment may apply, allowing a more efficient claim structure.

The real issue: lack of communication between loss adjusters

Different insurers often appoint different loss adjusters. This frequently results in:

• different reconstruction values
• inconsistent damage assessments
• poor use of insured capital

The role of the policyholder’s loss adjuster

A policyholder’s loss adjuster acts as a technical connector, ensuring:

• consistent valuations
• aligned criteria
• efficient coordination between insurers

This approach has frequently improved final compensation.

Conclusion

When multiple policies apply, the claim becomes a technical coordination challenge, not just a damage assessment.

Understanding how coverage interacts is essential to avoid unnecessary losses.

Does your claim involve more than one policy?

We analyse claims involving community insurance, private policies and compensation schemes.

Sometimes, proper coordination makes all the difference.