In property insurance, the purpose of coinsurance clauses is to prevent underinsurance.

Name: In property insurance, the purpose of coinsurance clauses is to prevent underinsurance.
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Coinsurance clauses in property insurance policies encourage policyholders to insure their property to a value close to its actual replacement cost. This helps prevent underinsurance by imposing a penalty on the claim amount if the property is not insured to a specified percentage of its value, typically 80-90%.

In Property Insurance, the Purpose of Coinsurance Clauses Is to Prevent