Which provision states that if the insurer broadens coverage without additional premiums, the benefit applies to all similar policies?

The correct choice, which is the liberalization provision, is significant because it ensures that any broadening of coverage by the insurer automatically extends to all similar policies without requiring policyholders to pay additional premiums. This provision protects policyholders by allowing them to benefit from enhancements in coverage that the insurer chooses to implement during the policy term.

For instance, if an insurance company decides to improve certain coverage terms across all of its policies, those upgrades automatically apply to existing policyholders, ensuring that they receive the most current level of protection available. This approach not only fosters goodwill between the insurer and the insured but also encourages clients to maintain their policies, knowing they will automatically benefit from any advantageous changes.

Understanding the context of the other options highlights how they address different aspects of insurance. The insurable interest provision relates to the requirement that policyholders have a financial stake in the item or individual they are insuring. The subrogation provision deals with the insurer's right to pursue recovery from third parties after paying a claim. The appraisal provision outlines the process for resolving disputes about the value of a claim. Each of these provisions serves distinct purposes within insurance contracts and does not address the automatic application of broader coverage benefits like the liberalization provision does.