What is an insurance exhaustion clause?

An insurance exhaustion clause is a clause in an insurance policy that states that if the amount of insurance is depleted by a claim, then the policyholder will be responsible for any additional costs that arise due to the claim. This clause applies to both primary and excess insurance policies. In Oregon, insurance exhaustion clauses are often found in liability insurance policies. Liability insurance policies provide coverage to the policyholder in the event that they are sued for damages caused by their negligence (or the negligence of their employees). If the damages exceed the coverage of the policy, the insurance exhaustion clause means that the policyholder is responsible for paying any additional costs that cannot be covered by the insurance policy. Insurance exhaustion clauses are important because they protect the policyholder from having to pay all the costs associated with a claim that may exceed the amount of insurance they have. Without the clause, the policyholder could be responsible for any damage done, even if they have already used up all their insurance coverage. The insurance exhaustion clause is an important protection for policyholders in Oregon, and it is important to understand how this clause works and the implications it can have for policyholders. It is also important to ensure that the amount of coverage in a policy is sufficient and adequate for the policyholder’s needs.

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