The main purpose of the coinsurance clause is to

Question

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The coinsurance clause is designed to provide an incentive for adequate coverage by requiring policyholders to maintain a certain level of insurance relative to the value of the insured property. If they fail to do so, they may be subject to a penalty in the event of a loss. This helps ensure that the policyholder has sufficient coverage to rebuild or replace their property, and reduces the risk of underinsurance.

The Main Purpose of the Coinsurance Clause Is to