A North Carolina appellate court recently construed Virginia law to hold that “other insurance” clauses identical in effect are mutually repugnant and cancel each other out. Spruill v. Westfield Ins. Co., 794 S.E.2d 556 (N.C. Ct. App. 2016).

The court was faced with competing “other insurance” clauses in two underinsured motorist policies, both of which provided coverage. One of the insurers argued that the clauses were not identical and therefore could not be mutually repugnant. The court disagreed, holding that mutual repugnancy comes not just from identical policy form but also when policies are identical in effect. It held that because the two “other insurance” clauses led to the result of both carriers being excess, the clauses were deemed to be mutually repugnant. Thus, the default position applied and each insurer paid a pro rata portion of the loss.