Which of the following is true of coinsurance?

Question

Quizplus · Accepted Answer

Coinsurance is a provision under which the insurer and the insured share costs, after the deductible is met, according to a specific formula. This helps to ensure that the insured also bears some portion of the risk and helps to reduce the likelihood of moral hazard. Coinsurance is commonly found in property insurance policies, such as homeowner's insurance, where the insured must maintain coverage for a certain percentage (e.g., 80%) of the property's value in order to be fully reimbursed for losses.

Which of the Following Is True of Coinsurance