The Dilemma of Concurrent Coverage: Carriers Insurance Co. v. American Policyholders Insurance Co.

Insurance draftsmen responding to consumers' demands for comprehensive automobile liability protection have attempted to create precise, extensive coverage for the insured while at the same time limiting the insurer's liability if possible. One consequence of this effort is that when two or more policies cover the same risk and person and concurrent coverage results, the insurers may attempt to reduce their liability on the grounds that other insurance is available. Insurers achieve this contingent coverage through the device of "other insurance" clauses—a judicially approved means of reducing or avoiding liability if other valid and collectible insurance exists. These clauses originated in the field of property insurance to preclude windfalls caused by overinsurance, and their use gradually spread throughout the insurance industry. In Carriers Insurance Co. v. American Policyholders Insurance Co., the Maine Law Court grappled with a conflict between two "excess insurance" clauses. Although the Law Court strove for a rule capable of bringing certainty and simplicity to the resolution of concurrent coverage disputes, it nevertheless failed to diminish the confusion surrounding the twin issues of how to assign liability and how to apportion the loss. The mode of analysis undertaken by the court, and its decision to dismiss the conflicting excess clauses and to divide the loss equally between the two insurers, illustrate the inadequacy of courts generally to deal with concurrent coverage problems without guidance from the insurance industry or the legislature. The purpose of this Note is to suggest that in Carriers the Law Court missed an opportunity to clarify concurrent coverage law and instead announced a rule that may produce unintended, inequitable results.