Primary and Noncontributory clause

This clause is recommended mainly in policies where the property is simultaneously covered in any other policies having adverse terms like No waiver of Under insurance or high deductibles or imposition of Loss limits etc.

In such a situation insureds /brokers demand that all claims should be settled in this policy as per terms agreed herein.
Therefore the clause is worded as under

"While observing all terms and conditions of the policy, it is hereby understood and agreed that company would pay all claims reported under this policy applying the terms and condition as agreed herein and without taking into consideration the existence  of any other concurrent policy covering the same property at the time of loss.
This clause becomes unavoidable when a global policy is issued by a foreign reinsurer covering same property at the time of loss because master policy is invariably issued with loss limits and higher deductibles.
In one of the case it was observed that the local IAR policy was issued by xyx company at a deductible of rupees Rs 50 lacs as prevailing in market whereas  Global master policy was issued  with a higher deductible of 5 million USD.
In such a scenario insured must take "Primary and Non contributory clause" in his local policy failing  which he would not be able to recover his loss at agreed deductible of rupees 50 lacs because of application of condition of contribution appearing in local policy.
Have seen ample number of cases in my carrier where claims were reduced drastically applying contribution clause by the local insurer because insured forgot to take this clause in his local policy.

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