Where a person underinsures property, this clause in the policy allows the insurance company to pay only a proportion of the insured amount, the policyholder bearing the balance of the claim.
A coinsurance clause; a clause requiring an insured to purchase insurance for a stipulated portion of the entire value of the thing insured; see General Average; Particular Average.
A clause in a marine insurance policy, whereby partial losses are subject to special conditions (e.g. a franchise or deductible is to be applied to claims).
A clause in an insurance policy which provides that where, at the time of a loss, the sum insured is less than the value of the property insured, then the settlement will be scaled down in proportion to the level of the underinsurance.
A clause providing that similar items in one location or several locations which are insured by a policy shall be covered in the proportion that the value of each bears to the value of all. Previously known as the "Pro Rata Distribution Clause" and the "Average Distribution Clause." See also Pro Rata Distribution Clause.
The clause in marine policy which sets out the coverage provided in the event of partial loss.