What insurance policy provision defines how the policy will respond if there is more than one insurance policy written on the same risk?

The provision that defines how an insurance policy will respond when there are multiple insurance policies written on the same risk is known as the "Other insurance" clause. This provision clarifies the responsibilities of each policy in the event of a loss by addressing the issue of overlapping coverage.

In situations where more than one policy covers a particular risk, the "Other insurance" clause outlines how claims will be paid. It typically indicates whether policies are to pay on a pro-rata basis (each insurer pays a portion of the claim based on the limits of their policies), on a primary/excess basis, or in another specific manner.

This provision is crucial because it helps prevent an insured from collecting more than the total amount of the loss, ensuring that insurers share the financial responsibility appropriately based on the terms of their individual contracts. Understanding this concept is vital for both policyholders and insurance professionals, as it can significantly affect how claims are handled and settled.