Q.Distinguish between double insurance and re-insurance.

The two are easily confused, but they differ in who arranges the extra cover — the insured, or the insurer.

Double insurance and re-insurance are distinguished as follows:

1. Who takes the extra cover. In double insurance, the insured takes out more than one policy on the same subject matter against the same risk. In re-insurance, an insurer who has already accepted a risk passes part of it on to another insurer.
2. Parties involved. Double insurance involves one insured and several insurers, all dealing directly with the insured. Re-insurance involves the original (ceding) insurer and the re-insurer; the original insured deals only with the original insurer.
3. Relationship of the insured. In double insurance the insured has a direct contract with each insurer. In re-insurance the insured has no direct relationship with the re-insurer. …