Which scenario best describes double insurance?

Double insurance refers to a situation where multiple insurers provide coverage for the same risk simultaneously for a single insured entity. This means that when an insured has two or more insurance policies covering the same subject matter and the same risk, these policies can effectively overlap. It allows the insured to recover damages up to the total amount of the coverage provided by all policies if a loss occurs, but the insured is not entitled to collect more than the actual loss suffered.

In the context of insurance, understanding double insurance is crucial because it raises important considerations regarding claims, payouts, and potential liability in cases of loss. For instance, if a loss occurs, the insured has the right to claim compensation from any of the insurers covering that risk, but they cannot profit from the situation by claiming more than the actual loss.

The other scenarios, while related to insurance, do not accurately capture the concept of double insurance. Having multiple policies for additional coverage does not necessarily mean those policies cover the same risk; they could serve different purposes or different aspects of risk. Sharing a policy between two policyholders does not describe double insurance either, as it focuses on who holds the policy, not overlapping coverage for the same risk. Lastly, purchasing a policy that exceeds one's needs does not pertain to