pro rata clause

pro rata clause
A clause in an insurance policy, otherwise known as a proportionate recovery clause, to the effect that the insurer shall not be liable for any greater proportion of any loss which may occur than the amount named in the policy shall bear to the entire amount of insurance upon the property. 29A Am J Rev ed Ins § 1707. The provision in an automobile liability insurance policy that if the insured has other insurance against a loss covered by the policy, the insurer shall not be liable for a greater proportion of such loss than the applicable limit of liability stated in the policy bears to the total applicable limit of liability of all valid and collectible insurance against such loss. 7 Am J2d Auto Ins § 200.

Ballentine's law dictionary. . 1998.

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