Apportionment Clause

What Does Apportionment Clause Mean?

An apportionment clause is a provision in a property insurance policy that states how much the insurance company will pay for a loss or damage if the insured has another policy covering the same risk.

Insuranceopedia Explains Apportionment Clause

Supposing you have two insurance policies that cover the same property against fire. If the building is damaged by fire, the apportionment clause will inform you of just how much insurance you are able to claim from each of these two policies. As with any insurance policy, you will not get an amount that exceeds the value of the damage or the loss. The apportionment will ensure that you cannot make a claim on both policies and make a profit from them.