The Answer to the Age-Old Questions of “Coinsurance”

The coinsurance clause is one of the most confusing aspects of property insurance policies. Those who do not insure to the correct value will realize its significance sooner or later. Therefore, as insurance professionals, we must understand the provision and its effect on loss payments. Coinsurance has been a part of our insurance contracts as far back as 1885. We will explore the history of coinsurance, its purpose then and now, and what we need to tell our insured.