Which method results in each insurer paying an equal amount until the loss is paid or a policy limit is exhausted?

The method that results in each insurer paying an equal amount until the loss is paid or a policy limit is exhausted is known as contribution by equal shares. This approach is typically used when multiple insurers cover the same risk, and it ensures that the burden of the loss is shared equally among them. Each insurer contributes an equal portion towards the claim, ensuring fairness and preventing any one insurer from bearing an excessive share of the loss.

By utilizing contribution by equal shares, the claims process becomes more straightforward since all participating insurers are held to the same responsibility. This method fosters collaboration among insurers and simplifies the payment process, making it clear that each entity is equally accountable for losses incurred.

In contrast, the other methods—like pro-rata share, first loss, and risk-sharing—operate under different principles that do not ensure equal contributions from insurers until a loss limit is reached. Each of those approaches has its specific mechanics regarding how and when payments are made, but they do not enforce an equal sharing of loss responsibility among the insurers involved.