9873

Coordination of Insurance Policies

Sometimes, as the result of a mistake by the insured, multiple property or liability insurance policies will provide coverage for the same event, and no policy will effectively have made itself "secondary" or "excess" to the others. In these instances, the law must allocate responsibility among the insurers. There are two main methods for "coordinating" these policies. One method is "pro rata by limits" in which each policy pays in proportion to its relevant limit. A second method is "equal shares" in which policies pay equally until they are exhausted, with larger policies being invoked in the event any equal payments theretofore made do not satisfy the amount owed by the insurer. This Demonstration lets users coordinate up to three insurance policies. Users can set the amount owed by the insurer, use locators to set the policy limits, and choose the method of coordination.

THINGS TO TRY

SNAPSHOTS

  • [Snapshot]
  • [Snapshot]
  • [Snapshot]

DETAILS

Snapshot 1: pro rata by limits for the same liability amount and the same insurance policies.
Snapshot 2: equal shares for the same insurance policies as in the thumbnail, but for a lower liability amount.
Snapshot 3: two insurance policies coordinating using equal shares.
In the real world, things can get more complicated. There is, for example, the issue of how to handle deductibles and coinsurance. And so-called "time on the risk" may be relevant to the amount each insurer owes.
    • Share:

Embed Interactive Demonstration New!

Just copy and paste this snippet of JavaScript code into your website or blog to put the live Demonstration on your site. More details »

Files require Wolfram CDF Player or Mathematica.









 
RELATED RESOURCES
Mathematica »
The #1 tool for creating Demonstrations
and anything technical.
Wolfram|Alpha »
Explore anything with the first
computational knowledge engine.
MathWorld »
The web's most extensive
mathematics resource.
Course Assistant Apps »
An app for every course—
right in the palm of your hand.
Wolfram Blog »
Read our views on math,
science, and technology.
Computable Document Format »
The format that makes Demonstrations
(and any information) easy to share and
interact with.
STEM Initiative »
Programs & resources for
educators, schools & students.
Computerbasedmath.org »
Join the initiative for modernizing
math education.
Step-by-step Solutions »
Walk through homework problems one step at a time, with hints to help along the way.
Wolfram Problem Generator »
Unlimited random practice problems and answers with built-in Step-by-step solutions. Practice online or make a printable study sheet.
Wolfram Language »
Knowledge-based programming for everyone.
Powered by Wolfram Mathematica © 2014 Wolfram Demonstrations Project & Contributors  |  Terms of Use  |  Privacy Policy  |  RSS Give us your feedback
Note: To run this Demonstration you need Mathematica 7+ or the free Mathematica Player 7EX
Download or upgrade to Mathematica Player 7EX
I already have Mathematica Player or Mathematica 7+