Which one of the following explains the effect of a co-insurance clause?
A) A co-insurance clause provides for more than one person paying the premium.
B) A co-insurance clause provides for the insurance claim to be split between two or more beneficiaries.
C) A co-insurance clause provides for the insured to assume part of the responsibility for any loss.
D) A co-insurance clause provides for several different properties being insured under the same policy.
E) A co-insurance clause provides for the insurance company arranging their own insurance on a large policy.

Question

Quizplus · Accepted Answer

A co-insurance clause typically requires the insured to bear a portion of the losses, thereby sharing the risk between the insurer and the insured. This can help to lower premiums and discourage over-insurance or under-reporting of values.

Which One of the Following Explains the Effect of a Co-Insurance