In property insurance,coinsurance is:
A)an agreement between two or more insurance companies to jointly cover a large risk
B)a contractual agreement to make the insured bear a portion (usually small)of every loss
C)a contractual agreement to help equalize total claims to reinsurance premiums
D)a contractual agreement to discourage under insurance

Question

Quizplus · Accepted Answer

Coinsurance is a contractual agreement between the insured and the insurer to discourage under insurance. Under this agreement, the insured agrees to insure the property for a certain percentage of its value and in return, the insurer agrees to reduce the premium rates for the insurance policy. The purpose of this agreement is to ensure that the insured takes appropriate measures to insure their property adequately and to prevent any losses due to under insurance.

In Property Insurance,coinsurance Is