Definition of Apportionment:
Law: Division and distribution of assets and/or liabilities in proportion to the rights and interests of the parties involved.
Economics: Division and sharing carried out according to a plan or formula.
Accounting: Division of income and expenses in certain proportion and, in contrast to an allocation, over two or more accounts, departments, or entities.
Apportionment applies to many contexts. Where insurance is concerned, an apportionment is the allocation of a loss between all of the insurance companies that insure a piece of property. This allocation is used to determine the percentage of liability held by each insurer. For example, three insurers that each cover $60,000 on a $120,000 property are apportioned 50% of the claim if the property is destroyed. Apportionment can also apply to real estate, workers compensation, or the distribution of financial benefits.
Apportionments most often apply to situations of "other" or "double" insurance, where two or more insurance policies are taken out with the same insured party, on the same interest, on the same subject, against the same risks. Apportionments are most often defined in an apportionment or "other insurance" clause, which is usually part of the associated insurance policy.
How to use Apportionment in a sentence?
- Apportionment can refer to real estate or the distribution of economic benefit.
- Apportionments most often applies when two or more insurance policies are taken out with the same insured party.
- When dividing up the apportionment of your recent profits you should have a good accountant on hand to get things done right.
- The parcel of land was divided among the parties according to the apportionment agreement drawn up and mandated by the most recent court decision.
- If you need to split up some profits using apportionment can help make sure everyone gets their fair share with no problems.
- Apportionment describes the allocation of a loss between all of the insurance companies that insure a piece of property.
Meaning of Apportionment & Apportionment Definition