What Is Coinsurance & What Conditions Coinsurance Clause Apply?

Coinsurance is an arrangement which permits the Insured to receive a reduction in rate in return for purchasing insurance of not less than a given percentage, most commonly 80 or 90 percent of the value of the insured property. Coinsurance has the effect of distributing the cost of insurance fairly among all policy-holders, by requiring each to carry amounts of insurance proportionate to the value at risk. (more…)