When a scheduled item has been lost or destroyed, there is nothing left to insure. After insured property is destroyed, and an insurer indemnifies the insured, what happens to the insurance? Many property policies include a restoration of limits provision that answers this question. Three approaches are common. Some policies state that the limits are restored after a loss is paid, and some state exactly the opposite—that paying a loss does not reduce the policy limits. With others, however, after the insurer pays a total loss, coverage ceases and the insurer returns any unearned premium.


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