Think of two hay wagons arriving for the same load: one goes first, and the second only takes what is left. That is how coordination of benefits works when a person is covered by more than one insurance policy. It is the set of rules used to decide which insurer pays first, which pays second, and how much each must pay so the combined payment does not exceed the covered expense. It appears most often with health insurance, but similar priority rules can matter with auto medical payments, workers' compensation, Medicare, and family coverage through two employers.

In practice, coordination of benefits can change who sends payment, how long a claim takes, and what balance remains. The "primary" plan usually pays under its own terms first. The "secondary" plan may then pay some or all of the unpaid amount, subject to its own limits, exclusions, and deductible, copay, or subrogation rights. If an insurer applies the wrong order, payment can be delayed or denied until records are corrected.

For an injury claim, these rules matter because medical bills often pile up before a settlement is reached. Coordination of benefits can affect whether a provider gets paid promptly and whether an insurer later seeks reimbursement from the recovery. In Vermont, fault can also change the final outcome of the underlying injury case: under the state's modified comparative negligence rule, 12 V.S.A. § 1036 (2024), a claimant who is 51% or more at fault cannot recover damages.