Common Provisions and Clauses — Quick Study Table

Clause	Main Purpose	Practical Example
Assignment	Prevents policy rights from being transferred without insurer consent.	A homeowner cannot assign their policy to a buyer without insurer approval, but may assign claim proceeds to a contractor after a loss.
Appraisal	Provides method to resolve value disputes without litigation.	After a fire, insured and insurer disagree on repair cost; appraisers + umpire determine amount of loss.
Other Insurance	Explains how coverage applies when multiple policies cover the same loss.	Both a landlord’s policy and tenant’s policy cover fire damage; clause dictates whether one pays primary and the other excess.
Notice of Claim	Requires prompt reporting of a loss or occurrence.	A driver must notify the insurer immediately after an auto accident so the claim can be investigated.
Proof of Loss	Requires a sworn statement documenting the loss details.	A homeowner submits an inventory and receipts within 60 days of a burglary.
Cancellation / Nonrenewal	Governs policy termination rules and notice requirements.	Insurer cancels for nonpayment with 10 days’ notice; nonrenews a homeowners policy with 30 days’ notice as required by state law.
Mortgagee Clause	Protects lender’s rights even if insured violates policy conditions.	Bank still gets paid after fire loss even if the insured misrepresented occupancy, provided the bank complied with its duties.
Loss Settlement	Specifies valuation method: Actual Cash Value (ACV), Replacement Cost (RC), or Agreed Value.	Roof claim: ACV pays replacement minus depreciation; RC pays full replacement cost.
Severability (Separation of Insureds)	Treats each insured separately, even though limits are shared.	If one business partner commits fraud, the innocent partner may still have coverage.
Abandonment	Prevents insured from forcing insurer to take unwanted property.	Insured cannot abandon a totaled car at insurer’s office unless insurer agrees.
Recovered Property	Defines rights if property is found after claim is paid.	Stolen jewelry recovered after insurer already paid; insured must choose to return payment or let insurer keep salvage.