Which method is likely used for contribution calculation when two property insurance policies cover the same loss but differ in terms?

The correct method for contribution calculation when two property insurance policies cover the same loss but have different terms is the Pro Rata Method. This method ensures that each insurer pays a proportionate share of the loss based on the ratio of their coverage limits relative to the total coverage applicable to the loss.

In scenarios where multiple policies apply to the same type of loss but diverge in terms, the Pro Rata Method provides a fair approach to distribute liability according to each policy's specified limits. This helps prevent the insured from gaining an advantage by claiming the entire loss from one insurer while only partially utilizing the other policy.

If the policies have different terms, like varying coverage limits or specific exclusions, using a method that simply divides the claim could result in inequitable compensation. Thus, the Pro Rata Method addresses the variations effectively by considering the limits of each policy and ensuring that no insurer pays more than their fair share relative to the amount of coverage they provide.

The other options do not aptly address the situation at hand. The Independent Liability Method typically applies where each insurer is liable independently, irrespective of the other; the Excess Liability Method is relevant when one policy is in excess of another and would not be appropriate here. The Average Condition Method pertains to determining the insured