Adjustment clause

In insurance, an adjustment clause in a contract specifies how the amount of a claim (particularly a claim against an insurance company) will be determined for the purposes of a settlement, giving consideration to objections made by the debtor or insurance company, as well as the allegations of the claimant in support of his claim.

For example:

Adjustment of claims is not confined to claims against insurance companies. An allowance made by a creditor, particularly a storekeeper, in response to a complaint by the debtor respecting the accuracy of the account or other claim, or a reduction in the claim or account made to induce a prompt payment, is in a proper sense an adjustment.[2]

References

  1. Indiana Lumbermen's Mutual Ins. Co. v Fair (CA5 Miss) 109 F2d 607.
  2. 29A Am J Rev ed Ins § 1604.


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