What Is an Insurance Liberalization Clause?

If you have read your insurance policy book, you may have encountered the term "liberalization clause." Although this may be unclear at first, a liberalization clause is actually a simple addition to your policy protection.


A liberalization clause is a statement that any broadening of coverage that requires no additional cost is immediately available to you.

Broadened Coverage

In some cases, your insurance company will decide to add or enhance a coverage at no cost. When this happens, your policy's liberalization clause gives you immediate access to the new or enhanced coverage.

Regulatory or Legislative Changes

The liberalization clause also applies if an insurance company broadens coverage because of a new law or a ruling from a state regulatory agency.

Benefit to Consumers

A liberalization clause benefits you because you will not have to wait for written notification before you are eligible for the enhanced coverage.

Benefit to Insurance Companies

This clause saves your insurance company time and money because it does not have to create and mail endorsements to each policyholder.