Apportionment

DEFINITION of 'Apportionment'

The allocation of a loss between all of the insurance companies that insure a piece of property. This allocation is used to determine a percentage of liability for each insurer. For example, three insurers who each cover $30,000 on a $90,000 property are each apportioned a third of the claim if the property is destroyed. Apportionment can also refer to the distribution of economic benefit.

BREAKING DOWN 'Apportionment'

Apportionment has a slightly different application for real estate. In this case, it refers to the allocation of property expenses such as insurance and taxes between the buyer and seller. Apportionment can also describe the division of property between tenants in common.