If there were other existing insurance, how will coverage under crime insurance be affected?

In the context of crime insurance, the presence of other existing insurance policies can lead to a pro-rata allocation of coverage. This means that if multiple policies cover the same risk, the crime insurance policy will pay out only a portion of the claim, proportional to its coverage limits compared to the total coverage available across all policies.

Pro-rating ensures that the insured does not receive a windfall from multiple insurance payouts for the same loss, adhering to the principle of indemnity in insurance. The goal is to make the insured whole without allowing them to profit from the situation, which is a fundamental principle in the insurance industry.

This pro-rata approach helps manage the risk for the insurer as well, preventing excessive payouts that could arise if one policy were to cover the entire loss when there are several policies in effect. In this way, the coverage under crime insurance is balanced and fairly distributed according to the available insurance, leading to a fair settlement process for all parties involved.