Franchise Clause

Definition of "Franchise clause"

Marsha  Weaver, PA
  Sotheby's International Realty

Clause found in a marine insurance policy that states that the policy will not pay any claims less than a given amount but will pay claims in excess of that amount. The purpose of this clause is to eliminate the costs associated with processing small claims because their costs could easily exceed the actual amount of the# claim. This is a form of deductible insurance.

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