A necessary step.

Michigan made waves in the June 1907 issue of Best's Review (property/ casualty edition). The Co-Insurance Clause was legalized and amended the Michigan Standard Policy. It provided that when any person, firm or corporation made a written application, the company had the right to add the clause.

The Co-Insurance Clause, while little understood by many property owners, acted as protection for insurance companies as stated at the end of the clause. "It is understood by the undersigned that the effect of the above mentioned co-insurance clause when attached, will be to reduce the liability of said insurance company in case of loss, unless the property covered by said insurance is insured for X percent of its actual cash value."

According to Best's Review, the clause "is a necessity to the proper conduct of the insurance business."