Coinsurance Calculator

Coinsurance is a clause in property insurance policies that requires you to insure your property for a minimum percentage of its replacement value. If you don't meet this requirement and suffer a loss, your insurance company may reduce your claim payment.

For example, if your policy has an 80% coinsurance clause and your property is worth $500,000, you must insure it for at least $400,000 to avoid penalties.

The coinsurance penalty is calculated using this formula:

If your actual coverage is less than the required amount, your claim payment will be reduced proportionally. The penalty percentage shows how much your claim would be reduced for any loss. Total risk includes your deductible plus any potential coinsurance penalty for a $100,000 loss scenario.

Replacement Value

The cost to rebuild your property at current construction prices

Coinsurance Clause

A policy provision requiring minimum insurance coverage as a percentage of property value

Coinsurance Penalty

A reduction in claim payment when coverage is below the required minimum

Actual Cash Value

Replacement cost minus depreciation

Deductible

The amount you must pay out-of-pocket before your insurance coverage begins