pro rata clause

Definition of "pro rata clause"
  1. A section within an insurance agreement that only holds the insurance company responsible for a portion of the loss, depending on the coverage that can be obtained from other insurance policies for the same incident
How to use "pro rata clause" in a sentence
  1. The homeowner was surprised to learn that due to the pro rata clause in his insurance policy, the company would only cover part of the fire damage.
  2. When the car was vandalized, the pro rata clause ensured that the auto insurance company only paid a share of the repairs equivalent to their share of the overall insurance coverage.
  3. Thanks to the pro rata clause in their umbrella policy, the restaurant chain didn't have to pay the full amount for the slip-and-fall claim.

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