When Empire Insurance Company paid the claim for losses sustained by a car hire company when the hirer crashed their Lamborghini, it sought to recover its outlay from Allstate Insurance who insured the driver who was responsible for damage to the vehicle under the rental contract. The court held that Allstate was not entitled to rely on a provision in its policy which only covered a substitute vehicle ‘after all other collectable insurance has been exhausted’.

Under New York law, concurrent coverage is defined as two or more policies of insurance providing coverage to the same party for the same risk and for the same accident, occurrence, or event. It was found that this was a concurrent coverage dispute.

The Empire policy was a primary policy except when the vehicle was in the care, custody or control of another person, in this case the hirer. Comparing the two policies, the court found that Allstate’s coverage was primary and Empire could recover their outlay from Allstate.

In South Africa where there are competing dual coverage limitations in the two policies, the court will normally, on the basis of equity and indemnity, find that each insurer should pay half.

The case is Allstate New Jersey Insurance Company v Empire Fire and Marine Insurance Company.