The insurance with other insurers provision in an individual health insurance policy allows an insurer to pay benefits to the insureds on a pro-rata…

The "Insurance with Other Insurers" provision is an optional uniform provision in individual health insurance policies designed to prevent overinsurance and moral hazard. This clause allows an insurer to adjust its benefit payments on a pro-rata basis if it discovers at the time of a claim that the insured has other valid health coverage for the same loss. The critical trigger for this provision is that the insurer had not been given written notice of this other coverage prior to the loss. This ensures that the total benefits paid by all insurers do not exceed the actual medical expenses incurred by the insured.

A. The proximity to the policy's renewal date is irrelevant to the application of the pro-rata benefit provision for other insurance.

B. The grace period pertains to the time allowed for late premium payments, not the coordination of benefits with other insurers.

D. The total dollar amount of claims submitted by the insured does not trigger this specific provision for pro-rata benefit payments.

1. Code of Virginia, Title 38.2. Insurance. § 38.2-3505. "Other provisions." This section outlines the optional standard provisions for accident and sickness insurance policies. Provision 4, "Insurance with other insurers," explicitly states that the pro-rata liability applies to expense-incurred coverage when "this insurer has not been given written notice prior to the occurrence or commencement of loss" of the other valid coverage.

2. National Association of Insurance Commissioners (NAIC). Uniform Individual Accident and Sickness Policy Provisions Law (UPPL), Model #180. Section 3, Part B, Provision (4), "Insurance with Other Insurers." This model law, which forms the basis for Virginia's statutes, specifies that the insurer's liability may be limited if it "has not been given written notice prior to the occurrence or commencement of loss" regarding other existing coverage.

3. Pohlman, T. A., & Trieschmann, J. S. (2009). Risk Management and Insurance (1st ed.). University of Georgia. In discussions of health insurance policy provisions, university courseware and texts explain that coordination of benefits clauses, like the "Insurance with Other Insurers" provision, are activated by the existence of multiple policies covering the same loss, particularly when one insurer is unaware of the other policy.