What is the other insurance provision that limits the insurer's liability to a portion of the loss based on coverage amounts?

The correct answer is related to a principle in insurance known as "Pro Rata liability." This provision is significant because it helps to ensure that when multiple insurance policies cover the same risk, the liability of the insurer is shared proportionately based on the coverage amounts of each policy.

In essence, if a loss occurs and there are multiple policies in place, Pro Rata liability ensures that each insurer pays its fair share of the loss according to the limits of their respective policies. This prevents any one insurer from bearing an undue burden of the loss while others contribute less than their fair share. For example, if two policies cover the same loss and one has a higher limit, that insurer would pay a larger portion of the loss based on the limits of coverage agreed upon. This is particularly useful in situations where an insured party has multiple policies covering the same asset or risk, providing clarity on how losses will be shared and managed amongst the insurers involved.

The other options do not accurately describe this particular function of insurance. Aggregate liability pertains to the total limit of coverage available under a policy over a certain time period, which does not directly relate to how losses are distributed among multiple insurers. Excess liability usually refers to coverage that kicks in after a certain limit is reached