YOU ASK:
What is the definition of Coinsurance?
WE ANSWER:
Coinsurance is an agreement between the insurer and the policyholder that the policyholder share part of the risk. This requires the policyholder to pay a certain percentage of a benefit or claim before he will receive the full payment on the loss. Coinsurance is usually added as a clause to health insurance policies and property insurance policies.
For example, for a health insurance policy that has a 20% coinsurance clause, the policyholder will pay the deductible and 20% of the covered losses. Then the insurance company will pay 80% of the losses up to a specified limit. Then, when this limit is used up, the insurance company will start paying 100% of the losses.
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More insurance terms around coinsurance:
- Collateral
- Collateral Assignment
- Collateral Source Rule
- Collision Coverage
- Combined Ratio
- Commercial General Liability Insurance (CGL)
- Commercial Lines
- Commercial Multiple Peril Policy
- Commercial Paper
- Commission
- COBRA
- Claims Made Policy
- Chartered Property/Casualty Underwriter (CPCU)
- Chartered Life Underwriter (CLU)
- Chartered Financial Consultant (ChFC)
- Cell Phone Insurance
- Catastrophe Reinsurance
- Catastrophe Model
- Catastrophe Factor
- Catastrophe Deductible