What does Coinsurance Clause mean? Read on to discover the definition & meaning of the term Coinsurance Clause - to help you better understand the language used in insurance policies.
A coinsurance clause is a provision stating that the insurance company and the insured person will share in the expenses incurred by the insured, in case of health insurance, or the loss based on a fixed percentage of the value of the insured property, in case of a property insurance. Moreover, with property insurance, the insured faces a penalty and must pay more for a loss if they do not insure the property for a certain percentage of its full value. In other words, the insured must also pay for a certain portion of any claim in policies with coinsurance clauses.
We hope the you have a better understanding of the meaning of Coinsurance Clause.