Co-Insurance. What is it? How does it work?

When a property owner chooses to insure for less than the Insurance Company recommends, a co-insurance clause would be invoked in the policy.

Let’s assume a building has a $1,000,000 replacement value, but the property owner chooses to Insure it for only $800,000. The property owner is In effect agreeing to
assume 20% of the Insurance risk and in the event of a claim will share the ‘loss’ with the Insurance company.

Leave A Comment