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restoration of limits provision

A restoration of limits provision is when a scheduled item has been lost or destroyed, there is nothing left to insure.

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restoration of limits provision

A restoration of limits provision is when a scheduled item has been lost or destroyed, there is nothing left to insure.

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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.