What happens if multiple insurance policies cover the same vehicle?

When multiple insurance policies cover the same vehicle, one policy is designated as the primary coverage, while any additional policies act as excess coverage. This means that when a claim is made, the primary insurer is responsible for paying the claim up to its limits first. Only after the primary coverage is exhausted will the excess policies come into play to cover any remaining amount, assuming their limits have not been reached as well.

This process helps to ensure that there is a clear chain of responsibility regarding claims. It prevents situations where multiple insurers are competing to settle a claim, which could lead to confusion and delays. The other options imply alternatives that do not accurately represent the typical industry practice surrounding overlapping coverage.