What is the term for the provision that outlines how coverage will be affected when multiple insurances are applicable to a loss?

The term that describes how coverage will be affected when multiple insurances apply to a loss is known as the Pro Rata Liability Provision. This provision operates under the principle that when two or more policies cover the same risk, they will share the responsibility for the claim based on the proportion of coverage each policy provides.

For instance, if a loss occurs and multiple policies are in effect, the Pro Rata Liability Provision ensures that each insurer pays a portion of the claim equal to the ratio of their coverage limit relative to the total coverage provided by all insurers. This prevents the insured from receiving more than the actual loss amount by requiring the insurers to coordinate and share the payment.

The other options refer to different insurance concepts. A Waiver of Liability typically addresses the relinquishment of a right, often related to negligence claims, rather than coordinating payments from multiple insurers. The Subrogation Clause involves the insurer's right to pursue recovery from third parties after paying a claim to the insured, focusing on recovering funds rather than the allocation of payment among multiple policies. An Aggregate Limit Clause denotes a maximum limit of coverage for all claims during a specific period, not specifically addressing multiple insurance policies covering the same loss.