Final answer:
An Average Distribution clause may replace a coinsurance clause in certain circumstances. Coinsurance is when an insurance policyholder pays a percentage of a loss, and the insurance company pays the remaining cost.
Step-by-step explanation:
An Average Distribution clause may replace a coinsurance clause in certain circumstances. Coinsurance is when an insurance policyholder pays a percentage of a loss, and the insurance company pays the remaining cost. On the other hand, an Average Distribution clause allows the insurer to distribute the risk among a larger group of policyholders. This can be beneficial when there are higher risks involved or when there is a need for greater coverage.