State RegulationsMI specificDifficulty 2/5
A nurse in Lansing holds two individual disability income policies issued by the same insurer, and both contain the other insurance in this insurer provision. She becomes totally disabled and submits claims under both policies. How are the benefits handled?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under the other insurance in this insurer optional provision authorized by M.C.L. 500.3436, an insured cannot stack multiple disability policies from the same company and collect overlapping benefits in full. The provision limits the total payable for the loss to the amount the insurer's provisions permit, preventing the insured from profiting from duplicate coverage within the same insurer while still leaving a genuine claim payable.
Why the other options are wrong
- A) Independence of the contracts is exactly what the provision overrides; the same insurer's aggregate liability is capped by M.C.L. 500.3436.
- C) Duplicate coverage limits the insured's recovery, not the insurer's obligations beyond the permitted total.
- D) The provision does not select one policy; it caps the combined amount payable across the insurer's policies for the loss.
Memory hook
Two policies, one carrier, one cap: no double-dipping at the same company.