What happens if you are insured twice for the same thing?

You do not get paid twice. Insurance operates on the principle of indemnity — the purpose is to restore you to the position you were in before the loss, not to profit from it — and the mechanism preventing double payment is called contribution.

How contribution works. Where two or more policies cover the same loss, the same interest and the same period, the insurers share the claim between them, typically in proportion to their respective limits or on an equitable basis. You claim from one, and that insurer recovers a share from the other. You receive the value of the loss once.

Most policies contain a clause requiring you to disclose other insurance and limiting their liability to a rateable proportion.

How people end up double insured, usually without realising:

Packaged bank accounts including travel insurance, mobile phone cover or breakdown cover that people separately buy elsewhere. This is the most common case by a wide margin.

Credit card benefits duplicating travel or purchase protection.

Legal expenses cover on home, motor, a bank account and a union membership simultaneously.

Gadget cover on home contents plus a separate device policy or retailer plan.

Breakdown cover included with a new car or a bank account and bought again.

Extended warranties overlapping with statutory rights and manufacturer guarantees.

Why it matters. You are paying two premiums for one benefit. Nobody will tell you, because neither insurer knows about the other unless you say.

The occasional exception. Some benefits are additive — personal accident policies and some life and critical illness products pay fixed benefits rather than indemnifying a loss, and multiple policies can each pay in full. Indemnity policies covering property and liability do not work this way.

What to do: list what you hold, including anything attached to bank accounts, credit cards, memberships and employment, and cancel genuine duplicates.