Automatic Reinstatement Clause
Definition of "Automatic reinstatement clause"
Provision in a property or liability policy stating that after a loss has been paid, the total original limits of the policy are once again in effect. For example, assume a loss of $40,000 has been paid under a $100,000 property damage coverage homeowners insurance policy. After payment of the loss, the original $100,000 is reinstated.
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