Whether you need property insurance for a building that you recently purchased or you’re shopping around for new insurance, you may encounter a variety of terms that leave you somewhat puzzled. One of those terms is coinsurance.
It’s not unusual for policyholders to face a penalty if they fail to purchase a sufficient amount of insurance. That penalty is referred to as coinsurance. You might rightfully wonder why an insurance carrier would care about the amount of insurance that you purchase. The reason is related to the ratio of insurance to value, or the limit of insurance to the value of the subject property. Read more