Apportionment Clause [Insurance] Law and Legal Definition

Apportionment Clause is a clause seen in insurance policies. An apportionment clause prescribes the method of determining the insurer's portion of liability for loss where property is covered by other insurance. Pursuant to this provision, the insurance proceeds are distributed in proportion to the total coverage.

The following is an example of a case law referring to ‘apportionment clause:’

Double insurance is where two or more insurances are made in favor of the same assured, on the same interest in the same subject against the same risks. "Other Insurance" must be on the same interest, and insurance obtained by a third person upon another distinct insurable interest does not constitute "other insurance" within the meaning of an apportionment clause. [St. Paul Fire & Marine Ins. Co. v. Protection Mut. Ins. Co., 607 F. Supp. 388 (D.N.Y. 1985)].