What is the primary purpose of the coordination of benefits (COB) provision?

The primary purpose of the coordination of benefits (COB) provision is to avoid duplication of benefit payments. This provision is crucial for individuals who have multiple insurance policies, as it establishes a system for determining which policy is primary and which one is secondary when it comes to paying out claims for covered services. By coordinating the benefits between the multiple insurance providers, the COB process ensures that the total payouts do not exceed the actual costs of the services rendered, while allowing the insured to maximize their benefits.

This system helps prevent insurance companies from paying out duplicative claims that could otherwise lead to overpayment situations. It promotes fairness in claims processing while protecting the financial integrity of the insurance system. Ultimately, the COB provision helps policyholders receive the necessary benefits without the risk of receiving more compensation than the covered costs warrant.