What Is Coinsurance for Commercial Property or Homeowners Insurance?

Home » Insurance Coverage Topics » What Is Coinsurance for Commercial Property or Homeowners Insurance?

What Is Coinsurance for Commercial Property or Homeowners Insurance?

Posted on

What is Coinsurance?

In regards to Commercial Property or Homeowners Insurance, coinsurance is a bit of a misnomer. In health insurance, it means you are literally coinsuring part of each claim up to a certain dollar amount. In property insurance, it’s a bit different. In the video below, I will attempt to explain it in layman’s terms.

Irmi, an online authority for all things insurance, has an exhaustive article explaining Property Coinsurance to those who want to really gain a full understanding. Most people probably just want the high view so they can avoid its traps! That is the scope of this article and the video below.

In a nutshell, here is what you should know about it:

  • It’s the amount for which you are obligated by the insurance carrier to insure your commercial property or home without incurring a penalty
  • Failure to comply with coinsurance will result in penalized claim payouts equal to the amount by which you are “underinsured” (according to the coinsurance clause)
  • Insurance carriers, through their independent insurance agents, often provide “cost estimators” whereby they will suggest (or even mandate) what they believe is the correct valuation
  • Ideally, you want to have coinsurance waived from your insurance policies entirely, if possible

Coinsurance for Commercial Property and Homeowners.... Explained in 7:22 minutes

Let's reduce your rates and improve coverage!

Most people don’t understand their unique risks or their insurance and are therefore buying the wrong coverage and paying too much. If you request insurance quotes from us, we will implement our simple 3-step process to identify your key exposures, improve insurance coverage and reduce rates.

© Bry Shields III, CLCS, CIC. ALL RIGHTS RESERVED. | Website by SERVRON