If an insured has two Dwelling policies covering the same property, how much will Policy A pay if there is a $12,000 loss?

In a situation where an insured has two Dwelling policies on the same property, the way the claims are handled falls under the principle of "pro rata liability." This principle stipulates that if multiple insurance policies cover the same risk, each policy will pay a proportionate amount relative to its coverage limits.

Assuming both policies cover the same loss and that they also apply the pro rata method, the payment from Policy A would depend on the coverage limits of both policies. If we consider that Policy A could be responsible for 1/3 of the total insurance coverage for the property, then it would pay for $4,000 of the $12,000 loss.

Therefore, if Policy A pays out $4,000, this indicates that it is fulfilling its share of the claim based on how much insurance it provides in relation to the total coverage. This method ensures that claims are handled fairly and that no single policy pays more than it is proportionally responsible for. The total paid out for the loss would ultimately equate to the full amount of the loss, subject to the limitations of each individual policy.