Below is a recent question posed by one of our Insurance Carrier clients that may be instructive for all.
 
"I have a case where two carriers have concurrent coverage.  Our limits are 50/100 and the other is a 25/50.  If a settlement is reached for the injured party would that be based on the combined  limits or a 50/50 split if it was within our limits?  Insurance Carrier A has retained Defense for the insured, and Insurance Carrier B is acting as excess.  If either one of us obtains a release are both released?  Also, how would it work if we settled the claim for $20,000.  Would we then be able to require Insurance Carrier B to pay us back their portion of that settlement?"
 
Our response was "There is no short answer to that one." As for the release, you should require that all insured defendants are listed on the release (Insurance Carrier A policyholder/driver and Insurance Carrier B driver/policyholder).
 
The answer to the sharing of the settlement costs  depends on the reading of the "Other Insurance" clauses in both Insurance Carrier A's policy and the Insurance Carrier B policy. Generally, where the terms regarding payment obligations in two or more policies conflict, "insurers must contribute in the proportion their policies bear to the limit of coverage at that level." Jefferson Ins. Co. of N.Y. v Travelers Indem. Co., 92 N.Y.2d 363, 372, 703 N.E.2d 1221, 681 N.Y.S.2d 208 [1998]; see Lumbermens Mut. Cas. Co. v Allstate Ins. Co., 51 N.Y.2d 651, 655, 417 N.E.2d 66, 435 N.Y.S.2d 953 [1980]; Castricone v Riggi, 259 A.D.2d 815, 816, 686 N.Y.S.2d 175 [1999]).
 
Insurance Carrier A policy indicates:
 
"If other valid and collectible vehicle liability coverage applies, then we will pay the proportion of damages payable that our applicable limit bears to the sum of our applicable limit and the limits of all applicable valid and collectible liability coverage that applies to the accident. However, the liability coverage provided by this policy applies as excess coverage over any other valid and collectible coverage provided for a non-owned car or a temporary substitute car."
 
First question: Is this involving a non-owned car or a temporary substitute car?
 
Second inquiry is: Do you have the Insurance Carrier B policy---as we would need to see their "other insurance clause."
 
Where the same risk is covered by two or more policies, each of which was sold to provide the same level of coverage (as is the case here), priority of coverage (or, alternatively, allocation of coverage) among the policies is determined by comparison of their respective "other insurance" clauses (see Great N. Ins. Co. v Mount Vernon Fire Ins. Co., 92 NY2d 682, 686-687, 708 NE2d 167, 685 NYS2d 411 [1999] [hereinafter, Great Northern], citing State Farm Fire & Cas. Co. v LiMauro, 65 NY2d 369, 482 NE2d 13, 492 NYS2d 534 [1985]; see also Jefferson Ins. Co. of N.Y. v Travelers Indem. Co., 92 NY2d 363, 372, 703 NE2d 1221, 681 NYS2d 208 [1998]). An "other insurance" clause "limit[s] an insurer's liability where other insurance may cover the same loss" (15 Couch on Insurance 3d § 219:1). This may be accomplished by providing that the insurance provided by the policy is excess to the insurance provided by other policies, in which case the "other insurance" clause is known as an excess clause (15 Couch on Insurance 3d § 219:33; 22 Holmes' Appleman on Insurance 2d § 140.2 [B] [1]). Alternatively, an "other insurance" clause may limit the insurer's liability by providing that, if other insurance is available, all insurers will be responsible for a stated portion of the loss; an "other insurance" clause of this kind is known as a pro rata clause (15 Couch on Insurance 3d § 219:27-219:28; 22 Holmes' Appleman on Insurance 2d § 140.2 [A]).
 
In this case, the applicable "other insurance" clause of Insurance Carrier A is a pro rata clause.  It is well established under New York law that, where one of two concurrently applicable insurance policies contains an excess "other insurance" clause and the other contains a pro rata "other insurance" clause, the excess clause is given effect, meaning that the coverage under the policy containing the excess clause does not come into play, and the carrier's duty to defend is not triggered, until the coverage under the policy containing the pro rata clause has been exhausted (see General Acc. Fire & Life Assur. Corp. v Piazza, 4 NY2d 659, 669, 152 NE2d 236, 176 NYS2d 976 [1958]; Harleysville Ins. Co. v Travelers Ins. Co., 38 AD3d 1364, 1367, 831 NYS2d 625 [2007], lv denied 9 NY3d 811, 877 NE2d 651, 846 NYS2d 601 [2007]; Firemen's, 233 AD2d at 193; see also International Bus. Machs. Corp. v Liberty Mut. Fire Ins. Co., 303 F3d 419, 429 [2d Cir 2002] [applying New York law]; Great Northern, 92 NY2d at 687; Pav-Lak Indus., Inc. v Arch Ins. Co., 56 AD3d 287, 288, 866 NYS2d 671 [2008]; Tishman Constr. Corp. of N.Y. v American Mfrs. Mut. Ins. Co., 303 AD2d 323, 324, 757 NYS2d 535 [2003]).
 
By contrast, where each policy contains an excess "other insurance" clause, so that giving each policy's clause effect would leave the insured without primary insurance, the clauses are deemed to cancel each other out, and the insurers are required to cover the  loss on a pro rata basis (see Great Northern, 92 NY2d at 687; Jefferson Ins. Co., 92 NY2d at 372; LiMauro, 65 NY2d at 373-374; Federal Ins. Co. v Atlantic Natl. Ins. Co., 25 NY2d 71, 75-76, 250 NE2d 193, 302 NYS2d 769 [1969]). (see State Farm v. LiMauro 65 N.Y.2d 369 Court of Appeals 1985).