Report No. 21
General.-This deals with the right of contribution.
Application of the section.-Sub-section (1) provides that where the assured is over-insured by double-insurance,1 each insurer is bound as between, himself, and other insurers to contribute rateably to the amount for which he is liable:-The important word is "contribute". The following points emerge:-
(i) the section does not apply unless there is over-insurance by double-insurance;
(ii) the section applies as between one insurer and the other insurers. It does not apply as between insurer and the assured, for which section 32(2)(d) applies;
(iii) contribution is proportionate to the amount undertaken by each insurer.
Position of assured.-As provided by section 32(2) (a), the assured can claim payment from the insurer "in such order as he thinks fit", so long as the total sum recovered by him does not exceed the indemnity allowed by the Act.2
Marine and other policies.-The Marine Insurance Act is obviously confined to rights and duties under marine insurance. In the case of competition or conflict between a marine policy on the one hand and a non-marine policy on the other, the Act as such does not apply; but on general principles, it has been stated,3 contribution would be applied. In practice, standard fire policies contain a clause limiting the insurer's liability to the rateable contribution of loss based on all subsisting assurances.
1. As to double-insurance, see section 32, English Act-clause 29.
2. See also notes under section 27 of the English Act-clause 24.
3. Dover, p. 449.