Some fire insurance policies contain a coinsurance clause that can operate to limit the insured's right to recovery.

Question

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A coinsurance clause requires the insured to maintain insurance coverage equal to a certain percentage of the property's value. If the insured does not meet this requirement and experiences a loss, the amount of the loss that exceeds the coverage limit can be the insured's responsibility. This can limit the insured's right to recovery in certain situations.

Some Fire Insurance Policies Contain a Coinsurance Clause That Can