Co-Insurance – What is it?

Co-Insurance is a contractual requirement shown as a percentage (90%) that specifies the percentage of insurance to value you must carry for your policy to be valid.
If you are deficient in this limit the penalties can be severe.

For Example:  You insure a building for $1,500,000 with a 90% co-insurance clause. 
8 months later you have a fire that does $400,000 in Damage – BUT the INSURANCE COMPANY  determines AFTER the loss that the actual replacement cost of your building is $2,000,000… 
Your insurance to value is 75% – your insurance company will only pay 75% of the actual loss $400,000 X .75 = $300,000 less the deductible  –  That’s a $100,000 PENALTY.  Work with us closely to accurately determine your property values so you don’t come up short on your claim.