https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3ADouble_recovery 2026-06-13T19:13:46Z Revision history for this page on the wiki MediaWiki 1.43.8 https://www.insurerbrain.com/w/index.php?title=Definition:Double_recovery&diff=8926&oldid=prev 2026-03-11T04:46:28Z

<p>Bot: Creating new article from JSON</p> <p><b>New page</b></p><div>⚖️ &#039;&#039;&#039;Double recovery&#039;&#039;&#039; is the prohibited outcome in which an [[Definition:Insured | insured]] party collects compensation for the same loss from two or more sources — such as from an [[Definition:Insurance carrier | insurance carrier]] and a negligent third party — in a manner that exceeds the actual amount of the loss. The [[Definition:Principle of indemnity | principle of indemnity]], which underpins most [[Definition:Property insurance | property]] and [[Definition:Casualty insurance | casualty]] coverages, exists precisely to prevent this result: insurance is designed to restore the insured to the pre-loss financial position, not to create a windfall.<br /> <br /> 🔧 Several legal and contractual mechanisms work in concert to guard against double recovery. [[Definition:Subrogation | Subrogation]] rights allow an insurer that has paid a [[Definition:Claims | claim]] to step into the insured&#039;s shoes and pursue recovery against the responsible third party, ensuring the insured does not also collect independently from that party for the same damages. [[Definition:Other insurance clause | Other insurance clauses]] coordinate payment obligations when multiple [[Definition:Insurance policy | policies]] cover the same loss. [[Definition:Collateral source rule | Collateral source rules]], which in some jurisdictions allow a plaintiff to recover from a tortfeasor regardless of insurance payments, can create tension with anti-double-recovery principles — and many states have enacted reforms to limit this effect. In [[Definition:Workers&#039; compensation insurance | workers&#039; compensation]], statutory [[Definition:Lien | lien]] provisions typically require an injured worker who recovers a [[Definition:Third-party liability | third-party]] judgment to reimburse the workers&#039; comp carrier for [[Definition:Benefits | benefits]] already paid.<br /> <br /> 🛡️ Preventing double recovery is not merely a legal abstraction — it has direct financial consequences for [[Definition:Insurance carrier | insurers]] and the broader market. When double recovery goes undetected, it inflates [[Definition:Loss cost | loss costs]], drives up [[Definition:Premium | premiums]], and can create perverse incentives that undermine the [[Definition:Risk pool | risk pool]]. [[Definition:Special investigations unit (SIU) | Special investigations units]] and [[Definition:Claims adjustment | claims adjusters]] routinely screen for potential overlaps during the settlement process, cross-referencing other coverage and third-party recovery prospects. For [[Definition:Reinsurance | reinsurers]], the issue surfaces in [[Definition:Treaty reinsurance | treaty]] wordings that address how recoveries from third parties or other policies should reduce ceded losses, ensuring that anti-stacking principles carry through the entire risk-transfer chain.<br /> <br /> &#039;&#039;&#039;Related concepts:&#039;&#039;&#039;<br /> {{Div col|colwidth=20em}}<br /> * [[Definition:Subrogation]]<br /> * [[Definition:Principle of indemnity]]<br /> * [[Definition:Other insurance clause]]<br /> * [[Definition:Collateral source rule]]<br /> * [[Definition:Anti-stacking provision]]<br /> * [[Definition:Coordination of benefits (COB)]]<br /> {{Div col end}}</div>

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