What Is Coinsurance for Commercial Property or Homeowners Insurance?

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What Is Coinsurance for Commercial Property or Homeowners Insurance?

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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

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