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Co-Insurance

(01) A provision in an Insurance Policy requiring the insured to contribute a fair and just share of the total premiums out of which losses are to be paid. The inclusion of this provision. Whether mandatory or optional, usually gives the insured lower rates than would otherwise apply. It provides for the full payment, up to the amount of the Policy, of all losses if the insured has Insurance at least to the named percentage of the value of the property covered and in some cases in any event. The loss payment in the case of most partial losses is reduced, proportionately, if the mount of Insurance falls short of the named percentage, e.g. 85% Coinsurance (or average) clause. Value Rs. 2,00,000, Insurance Rs. 1,70,000, Loss Rs. 40,000, Insured collects full amount of loss because his Insurance is equal to 85% of the value. Value Rs. 2,00,000, Insurance Rs. 1,00,000, Loss Rs. 40,000, Insurance is for only Rs. 1,00,000 or 1/2 of Rs. 2,00,000 the named percentage of value, so insured collects only 1/2 of the loss i.e., Rs. 20,000, (02) (i) The division of a risk among several Insurers. (ii) The sharing of losses on a proportionate basis between Insurer and the insured. In health Insurance, there is a provision which obligates the insured to bear a specified percentage of each otherwise insured loss, this percentage being specified in the Coinsurance clause, widely known as a “percentage participation clause.” (iii) In Reinsurance a treaty provision calling for the sharing of obligations between or among two or more Reinsurers.
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REINSURANCE: A treaty provision calling for the sharing of obligations between or among two or more Reinsurers.
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UK: the insurance, usually of large risks, by two or more direct insurers as a means of spreading the risk; also used in North America to describe certain types of reinsurance.

Co-insurance/co-insurer

1. Where two or more insurers share the same risk. A co-insurer is not bound to follow the decision of another co-insurer, except where he has given authority for the other insurer to act on his behalf. Each co-insurance is a separate contract with the insured. 2. Where an insured shares a part of the risk, e.g. 10 per cent of each claim (co-insurance clause), the insured is said to be a co-insurer.

Co-Reinsurance

Similar to co-insurance, but referring to reinsurance of risk rather than insurance.
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UK: 1. Provision in an excess of loss treaties making the reinsured a co-reinsurer. The clause requires the reinsured to retain net and unreinsured a part of the risk, in addition to the deductible, for its own account. Example: the reinsurer covers 95 per cent of the excess layer while the reinsured accepts 5 per cent of that layer and is not authorised to reinsure it. See LMX. 2. Several reinsurers sharing a reinsurance contract. Each co-reinsurer has a direct contract with the reinsured.

Coal Clauses (Institute of London Underwriters) 01.10.1982

These clauses cover named perils similar to ICC (B) with an important difference, namely, the coal clauses extend the Fire and explosion cover to include heating even when caused by spontaneous combustion and inherent vice or nature of the subject matter insured. It does not cover perils pertaining to incidental rail/road transits like (derailment and overturning of inland conveyance and collision of inland conveyance). Cover is valid from port of loading to port of discharge which also include lighterage and/or mid-stream loading or unloading.