Other insurance clauses, also known as excess clauses, seem to appear in almost every case with concurrent coverage under multiple policies. This common situation presents itself when an insured is driving a car owned by a friend or family member. Each insurance policy provides coverage for the accident, but both policies will also likely contain an excess clause. So, which policy would take the lead for coverage?
An excess clause is any clause which attempts to make the policy in question excess if there are any other policies of insurance that would cover an accident. Ohio Courts have addressed the problem of competing excess clause policies and ruled that:
“[W]here two insurance policies cover the same risk and both provide that their liability with regard to that risk shall be excess insurance over other valid, collectible insurance, the two insurers become liable in proportion to the amount of insurance provided by their respective policies.” Buckeye Union Ins. Co. v. State Auto. Mut. Ins. Co., 49 Ohio St. 2d 213, 361 N.E.2d 1052, 1977 Ohio LEXIS 344, 3 Ohio Op. 3d 330 (Ohio 1977)
When two different policies provide coverage for an accident, but both also contain excess clauses, the Courts have said the two companies are required to “prorate” the damage based on the limits of liability of each policy.
Ohio Courts have additionally held that one company does not become a volunteer simply for paying a claim and seeking contribution from the second insurance company. This ruling was made in order to encourage one of the companies to protect the insured, and to seek recovery after the insured has been protected. So if a situation arises where two policies provide primary coverage for an accident, but for the excess clause, one company can take the lead in paying the claim and seek contribution from the other company, under the Courts ruling in Buckeye Union.