After acquired property clauseFrom Wikipedia, the free encyclopedia

An after acquired property clause is a provision in a legal contract allowing property acquired after thecontract is signed to be covered by the agreement.

In a mortgage (of real property) or security agreement (of personal property), an after acquired property clauseprovides that any additional property acquired by the borrower after the mortgage or security agreement issigned will be additional collateral for the obligation. While such provisions can help give these obligations agood rating, they make it difficult to finance growth through new borrowing.

In the insurance industry, an after acquired property clause allows insurance coverage for property the insuredobtains after ratification of the policy or contract. This clause may operate only for a temporary period of timeduring which the insured must notify the insurer of the property so that the insurer can adjust the premiumsaccordingly.

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