Have you ever wondered what the coinsurance clause on your policy means?
Coinsurance may well be one of the most confusing and misunderstood terms in insurance.
Coinsurance is the percentage of value that the policyholder is required to insurance If you insure your property for less than that amount your insurance company imposes a “coinsurance penalty” once a claim is filed. The value is determined at the time of the loss and if the amount of insurance is found to under the stated coinsurance percentage then a penalty is applied reducing the claim payment.