State RegulationsMI specificDifficulty 3/5
A producer in Saginaw is comparing two related optional provisions in Michigan disability policies: other insurance in this insurer and insurance with other insurers. Which statement correctly distinguishes them?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
The two clauses solve two different overinsurance problems within the optional-provision framework of Chapter 34 of the Michigan Insurance Code. Other insurance in this insurer, authorized by M.C.L. 500.3436, caps the aggregate payable when one insured holds multiple policies from the same carrier. Insurance with other insurers instead applies when the overlapping policies come from different companies and apportions the loss proportionally among them. Both aim at the same goal, no profit from duplicate disability coverage, but they operate on different groupings of policies.
Why the other options are wrong
- A) This reverses the two provisions: the same-insurer clause handles duplicate policies within one carrier, and the other-insurers clause handles separate companies.
- B) The two provisions split by whose policies are involved; they do not both target only different companies.
- C) Full duplicate recovery is the result the provision prevents, not the result it authorizes.
Memory hook
This insurer caps one company; other insurers split the bill between companies.