Property Insurance What does the 90 percent coinsurance mean on the property insurance?

Answer 1

A 90% coinsurance clause means you must insure your property for at least 90% of its total replacement cost. If you insure it for less and then make a claim, the insurer may reduce your payout because you didn’t carry enough coverage.

In short:

• Insure for ≥ 90% of replacement cost = full payout (minus deductible).
• Insure for < 90% = reduced payout based on how underinsured you are.

It’s designed to make sure property owners maintain adequate insurance coverage.

Answer 2

It requires you to have the property insured for a minimum of 90% of its actual replacement value. If you do not meet the 90% requirement, any claim payment made can be reduce by the same percentage in which you are underinsured. This deters people from insuring property for limits lower than their insurance value in an effort to save premium dollars.

Bottom line: Make sure you have enough coverage on your policy to satisfy this requirement, otherwise if you have a claim you will not get paid the full amount.