What is a co-insurance clause?

A co-insurance clause is a type of clause found in many insurance policies. It requires the policyholder to pay a certain percentage of any covered losses. In the state of Florida, this clause is most commonly found in property and casualty insurance policies. The purpose of this clause is to help reduce the risk of a major loss for the insurer. By requiring the policyholder to pay a portion of the loss, the insurer will not have to cover the entire cost if a large claim is filed. The amount that the policyholder is required to pay is typically based on how much coverage they purchased. For example, if a policyholder purchased a policy with a 80/20 co-insurance clause, they would be responsible for 20% of any losses up to the policy limit. In addition to helping the insurer manage their risk, co-insurance clauses can also help policyholders by allowing them to purchase more coverage at a lower premium. When a policyholder pays a portion of the claim, they can purchase a higher level of coverage than if they had to pay the full cost of the claim. Co-insurance clauses are an important part of most property and casualty insurance policies, and policyholders in the state of Florida should be familiar with how they work. Understanding co-insurance clauses can help policyholders make informed decisions about the coverage they purchase and the risk they take on when filing a claim.

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What is a co-insurance clause?

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