What is coinsurance? How does it work?

Coinsurance clauses are used by insurance companies to prevent businesses from underinsuring their property. Generally, coinsurance requires a business to have coverage for at least 80% of the true value of the property. If a business does in fact underinsure their property, they can be penalized and in turn become a coinsurer with the insurance company in the event of a covered loss.

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Category: Commercial

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