Definitions for "Liberalization clause"
If policies or endorsement forms are broadened through legislation or rating authority rulings—and do not require premium increases—the "liberalization clause" automatically includes the broadened coverage in similar, existing policies.
A policy condition found in many standard policies which states that if the insurer adopts a revision that would broaden coverage without additional premium within some period of time prior to the policy period or during the policy period, the insured receives the benefit of such broadened coverage.
A feature of property policies that promises that any future change in the company’s form that would broaden coverage with no change in premium will automatically apply under the policy currently in force.