Enter Your Insurance Details
Insurance Value
The amount of insurance coverage you currently have
Property Value
The current replacement cost of your property
Coinsurance %
Percentage of property value you're required to insure (typically 80-100%)
Loss Amount
The dollar amount of your insurance claim
Your Coinsurance Analysis
Required Insurance Amount
$600,000
Your Insurance Coverage
$500,000
Coinsurance Percentage
83.33%
Penalty Applied
Yes
Claim Payment
$83,333
Coverage Visualization
0%
Required: 80%
100%
Calculation Breakdown:
Required Coverage (80% of $750,000):
$600,000
Your Coverage:
$500,000
Coverage Ratio:
83.33%
Penalty Factor:
83.33%
Claim Payment ($100,000 × 83.33%):
$83,333
Understanding Coinsurance
What is Coinsurance?
Coinsurance is a clause in your insurance policy that requires you to carry coverage equal to a specified percentage of your property's value (typically 80-90%). If you don't meet this requirement, you may face penalties when filing a claim.
The Penalty
If you're underinsured, the insurance company will reduce your claim payment proportionally. For example, if you only carry 50% of the required coverage, you'll only receive 50% of your claim amount (minus deductible).
How to Avoid Penalties
1. Regularly review your coverage limits
2. Update your policy when property values increase
3. Consider guaranteed replacement cost coverage
4. Consult with your insurance agent annually
Example Scenarios
| Scenario | Property Value | Insurance Carried | Required (80%) | $50k Claim | Payment |
|---|---|---|---|---|---|
| Adequate Coverage | $500,000 | $400,000 | $400,000 | $50,000 | $50,000 |
| Slightly Underinsured | $500,000 | $300,000 | $400,000 | $50,000 | $37,500 |
| Severely Underinsured | $500,000 | $200,000 | $400,000 | $50,000 | $25,000 |
Need Help With Your Insurance Coverage?
Our insurance experts can review your policy and ensure you have adequate protection.