What policy provision gives the insurer the right to repair or replace covered property?

The loss settlement provision is a key element of insurance policies that outlines the insurer's rights concerning how claims will be settled. This provision allows the insurer the option to repair, replace, or pay for the loss or damage of covered property instead of simply providing a cash settlement.

When an insured property suffers a covered loss, the loss settlement provision enables the insurer to choose between making repairs to restore the property to its pre-loss condition, replacing the damaged property, or providing a monetary settlement based on the policy's terms. This approach is significant because it helps to maintain the integrity of the insured property and often results in a more efficient resolution of claims.

In contrast, the other options do not grant the insurer this specific right. For instance, the "Our option provision" generally refers to the issuer's rights outlined in the policy but does not specifically detail the repair or replacement of property. The "Adjustment clause" relates to how adjustments may be made to the policy, typically concerning premiums and coverage limits. The "Subrogation clause" allows the insurer to pursue recovery from third parties after they have paid a claim on behalf of the insured, ensuring that the insurer can recoup losses when someone else is responsible for the damage.