A Research On The Concurrent Coverage In China

Financial compensation is the basic functions of insurance, but in order to prevent moral hazard, the compensation of the loss is one of the basic and important principles of the insurance law. In recent years, China’s insurance industry has sprung up and the cases that the same loss could get compensation from several insurers are not fresh anymore. Whether the insured nor the third party, who is got bodily injured or property damage in an insured accident, can go against the principle of compensation, getting additional benefits.In Chinese insurance law system, the constituent elements of overlapping insurance have been clearly defined. However, when more than one insurance contract is responsible for compensation for the same loss, which is discussed in this paper called "concurrent coverage", the law does not provide any regulation of how the loss should be shared among several insurers.In America, almost every insurance policy contains a clause explaining how the policy will respond to a loss, called "other insurance clause", which are important when concurrent coverage and overlapping coverage happens. Correspondingly, in China, some liability and property insurance policies also have this kind of clauses, including pro rata clause, excess clause and escape clause. The American courts have struggled with the application of other insurance clauses as they have tried to balance the interests of the parties involved in losses, as well as those of the public. Recently there are some solutions of the problem of "other insurance" in American law practice in mainstream theory ideas that can be learned by China insurance world.In the United States, regardless of the size of the insurance company, most of its property insurance policy and liability insurance policies are based on the standardized policy sample provide by Insurance Service Office, referred to as ISO. We could solve concurrent coverage problems to some extent, by giving full play to the role of the insurance industry associations, as ISO in the United State, despite that the insurance markets are quite different between America and China in insurance structure, insurance density and related legislation.By research on the conception, characteristic and solution of concurrent coverage, including the application of other insurance clauses, this paper attempts to supply some suggestions to resolve disputes related to the concurrent coverage, in order to improve our legislation in insurance industry.