Under coinsurance, a cap placed on the amount the policyholder must pay.

Coinsurance refers to the bargain between commercial property owners and the insurance industry. This clause in property policies encourages the property owner to gauge coverage needs by possible, not probable, maximum loss. With $1 million at risk but a probable maximum loss of $100,000, for example, the property owner would probably buy $100,000 insurance and bank on avoiding the larger disaster. The bargain offered by the insurance industry is a reduced rate per $100 of coverage if the owner agrees to buy coverage at a specified relation (80 percent commonly) to value (to possible maximum loss in other words). If the insured accepts the bargain but events prove the amount of insurance is inadequate to the stated coinsurance percentage, the insured becomes coinsurer in the same ratio as the amount of insurance bears to the amount that should have been carried. In major medical insurance, a provision by which both the insured person and insurance company in a specific ratio share the hospital and medical expenses resulting from an illness or injury.
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A clause that obligates the Insurer to pay only the proportion of any loss that the amount of Insurance purchased bears to the product of the Coinsurance percentage and the value of the insured property at the time of the loss. An indirect way to achieve the rate equity.

Rupee amount of coverage which in mercantile open stock burglary Insurance, stratifies the Coinsurance requirement. It represents the underwriters estimate of the maximum potential loss from burglary in a single theft. This Coinsurance requirement is the lesser of the Coinsurance limit or the Coinsurance percentage of the total value of insured merchandise.
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The amount of coverage mandated by the coinsurance clause in an open stock burglary policy.

Amount by which an insured’s recovery is reduced because the insured failed to comply with a Coinsurance requirement.
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A penalty taken out of the figure the policyholder is given by the insurance company for a property loss. This penalty is assessed due to the insurance company failing to carry enough coverage, as detailed in the coinsurance clause.

Under many property Insurance policies, the percentage of the value of insured property that an insured is required to carry to avoid a Coinsurance penalty. Coinsurance percentage vary among lines of Insurance, and an insured often has several choices offered at different premium rates.

A condition in a property insurance policy that makes the policyholder to have insurance as a percentage of the property’s value. If this insurance does not exist, the policyholder is charged the coinsurance penalty.

A kind of reinsurance, where the insurance company gives a segment of the life insurance policy it has written to the reinsurer. The reinsurer must pay some fraction of the death benefit to the insurance company upon the policy holder’s death. The insurance company must then pay the beneficiary.