A provision stating that the insured and the insurer will share all losses covered by the policy in a proportion agreed upon in advance, For example, 80-20 would mean that the insurer would pay 80% and the insured would pay 20% of all losses.

an agreements between the insurer and insured whereby the insurer agrees to provide a reduced premium rate for coverage and the insured agrees to carry a specified percentage of the replacement cost of the building.

A provision under which the insured agrees to carry a certain amount of insurance equal to a specified percentage of the property's value in order to receive full payment for a loss.

a part of a fire insurance policy that requires the policyholder to purchase coverage at least equal to a specified percentage of the replacement cost of the property to obtain full reimbursement for losses

A clause that requires an insured to pay part of a loss if the coverage provide under the policy limits is less than a specified percentage of the value of the property at the time of loss.

An agreement with the insurance company in which you agree to carry insurance on your property in an amount equal to a certain percentage of its actual cash value.

A clause in Commercial Property policies under which you agree to share in the loss to the extent that you are underinsured at the time of the loss. For example, if you owned a building worth $100,000 with a 90% coinsurance clause, your required insurance would be $90,000. If you chose to insure your property for $60,000, you would only receive 2/3 of the loss amount.

a policy clause requiring the insured to carry coverage equal to or exceeding 80 percent of the replacement value of the property

In the case of a partial loss where the property is not insured for the indicated percentage of its cash value at the time of the loss, the recovery from the company is based on a percentage. Example-- Your insurance policy contains a coinsurance clause of 80%. Your building sustained $100,000 in damages. The actual cash value of the property at the time of the loss was $500,000, but you only carried $300,000 of insurance. Based on the coinsurance clause, you should have had coverage of $400,000 (80% of $500,000). You can't recover the full $100,000 in damages. Instead, your recovery is limited by the percentage of your coverage ($300,000/$400,000) times the loss, or $75,000. If you had coverage of $400,000, your insurance would have reimbursed you for the full $100,000 loss.

A provision in a Property Insurance policy that stipulates the percentage of the property's value that must be insured in order to collect on a partial loss to the property without penalty. Example: Building (or Contents) Value: $ 500,000 Coinsurance Clause: 80% Amount of Insurance Required to be Purchased: $ 400,000 As long as $400,000 of insurance is purchased, a partial loss, say, $100,000 will be paid in full. If, as an example, only $300,000 insurance, or three-quarters of the required amount, were purchased, only three quarters of the loss would be paid- $75,000. There would be, in this example, be a $25,000 penalty. (See also Agreed Amount Clause)

"Coinsurance" refers to the bargain between commercial property owners and the insurance industry. This clause in property policies encourages the property owner to gauge coverage needs by possible, not probable, maximum loss. With $1 million at risk but a probable maximum loss of $100,000, for example, the property owner would probably buy $100,000 insurance and bank on avoiding the larger disaster. The bargain offered by the insurance industry is a reduced rate per $100 of coverage if the owner agrees to buy coverage at a specified relation (80% commonly) to value (to possible maximum loss in other words). If the insured accepts the bargain but events prove the amount of insurance is inadequate to the stated coinsurance percentage, the insured becomes "coinsurer" in the same ratio as the amount of insurance bears to the amount that should have been carried.

A Percentage listed on your property policy requiring you to insure the covered property to a minimum percentage of the value of that property in order to avoid a penalty during payment of any claims. A property policy will not pay more than the lesser of, the policy limit less any deductibles and coinsurance penalties, or the amount of the loss less anydeductibles and coinsurance penalties. In order to have the full amount of coverage a policy holder should insure his property to the full value.

A provision that requires an insured to maintain insurance equal to some selected percentage of value, normally 80 or 90 percent of actual cash value or replacement value of the property.

A clause requiring the insured maintains insurance on the property at least equal to a stipulated percentage of its value in order to collect partial losses in full.

A clause under which the insured shares in losses to the extent that he is underinsured at the time of loss. The insurer grants a reduced rate to the insured providing he carries insurance 80, 90, or 100% to value. If, at the time of loss, he carries less than required, he must share in his loss. For example, if an insured has a building worth $100,000 and carries an 80% coinsurance clause, it means that he agrees to carry at least $80,000 of insurance. If the insurance carried equaled $60,000, then any loss under the policy would be paid for on the basis of the comparison of $60,000 (amount carried) divided by $80,000 (amount agreed upon in advance) times the amount of the loss. Thus, the insured above would only receive 75% of a loss or $7,500 for a $10,000 loss.

A provision in many health insurance policies stating that the insured and the insurer will cover all losses under the policy in an agreed-upon proportion. For example, a plan with a 70-30 coinsurance clause would require that the insurer pay 70% of any loss and the insured would pay the remaining 30% of the loss.

A clause in insurance policies covering real property that requires the policyholder to maintain fire insurance coverage generally equal to at least 80 percent of the property's actual replacement cost. collateral assets that secure a loan.

A provision in a hazard insurance policy that states the amount of coverage that must be maintained -- as a percentage of the total value of the property -- for the insured to collect the full amount of a loss.

Provision in an insurance policy that "caps" the insurer's liability by stipulating that the owner of the property that has experienced damage must have another policy that covers usually 80% of the cash value of the property at the time of damage, in order to collect the full amount insured.