The Cromie Rule is a method used in property insurance to allocate loss when several policies overlap but do not provide identical protection.
It prevents disputes by forcing an apples-to-apples comparison of policy terms, limits, and payment expectations.
How the method is used
If one policy covers the same exposure with a higher deductible but broader peril language, and another offers lower deductible but narrower limit, the Cromie Rule sets each insurer’s share to preserve fairness based on stated coverages.
Claims workflow implications
Claims teams apply the method before final payment sequencing across insurers. It is used during subrogation and settlement conferences where each carrier must identify its true contribution.
Practical example
Two carriers insure the same property loss. One covers fire up to $500,000, another covers fire and theft up to $200,000 with stricter deductibles. The Cromie Rule helps determine each insurer’s proportionate obligation instead of a simple pro rata split by policy limit alone.
Regulation and market practice
Although different territories use different wording, the principle is to maintain fair allocation and prevent carriers from transferring avoidable losses to a single policyholder.