(i) A term sometimes applied to an alleged practice of some consumer credit organization under which lenders add new credit insurance coverage for consolidation loans without cancelling the old, thus producing a situation of over insurance for the amount of the loan outstanding. (ii) The term also applies to Liability insurance where the limits of liability in several policies may apply, and, in effect, “pyramid” into higher amounts of insurance being available than was originally intended.
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A situation, most often found in liability insurance, wherein the limits of liability on several policies apply to the same loss, and in so doing create a “pyramid” of higher amounts of insurance that originally seemed to be available.
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MEDICAL, USA: Situation in which a number of insurance policies that cover the same risk are in force. This results in higher limits of coverage than necessary for adequate insurance.Q