What is the term for a situation where more than one insurance policy shares in the loss until the lowest policy limit is exhausted?

The term that describes a situation where multiple insurance policies share the loss until the lowest policy limit is exhausted is known as "Contribution by equal shares." This approach ensures that each policy contributes to the settlement of a claim up to the limit of its coverage without the need for pro-rata calculations.

In this scenario, if two or more insurers are involved, each policy covers an equal portion of the loss. This method is particularly beneficial in cases where different insurers back the same risk, effectively spreading the financial responsibility across the contributing policies. This arrangement can prevent any single insurer from bearing the full burden of a significant loss, promoting fairness and equitability among the insurers involved.

The alternative terms mentioned do not convey this specific sharing mechanism. While "Pro-rata share" refers to dividing the loss based on the respective limits of the policies, this does not fit the scenario described where contributions are made in equal shares. "Aggregation of policies" and "Subrogation" relate to different aspects of insurance and liability, focusing more on collecting amounts from responsible parties or combining multiple policies for overall limits and do not pertain to the sharing of losses as defined in the question.