The endorsement provides a refund if your business income limit exceeds the amount required by
the coinsurance clause.
If you have already paid the maximum amount you need to pay on your policy for deductibles, you may not have to pay a deductible for the service, and then you will not have to reduce the cost of your deductible before getting the insurance company to pay their portion of the claim according to
the coinsurance clause.
Your out - of - pocket expenses would be the combined total of your part of
the coinsurance clause portion and your deductible which is $ 700, the insurance company then pays the $ 800.
Many policies include
a coinsurance clause.
With coinsurance the insurance policy beneficiary shares the cost of the insured service with the insurance company at a predetermined percentage outlined in
the coinsurance clause of the policy.
The coinsurance clause is calculated when the loss occurs.
Profits is subject to a 100 %
coinsurance clause, therefore it is critical that the value insured be adequate to avoid a coinsurance penalty being applied.
If your policy includes
a coinsurance clause, your insurer will reduce your loss payment if the damaged property is underinsured.
Once your insurer receives the statement,
the coinsurance clause in your policy will be suspended.
This coverage suspends
the coinsurance clause in your policy.
When this coverage is purchased,
the coinsurance clause found in the business income form does not apply.
If a loss occurs and you have failed to purchase additional coverage, your limits may fall short of the amount required by
the coinsurance clause.
The coinsurance clause appears in the conditions section of a commercial property policy.
Once you have provided a statement of values to your insurer,
the coinsurance clause in your policy will be suspended for one year (the term of your policy).
If you fail to provide one, your agreed value coverage will lapse and
the coinsurance clause will be reactivated.
One way to bypass
the coinsurance clause is purchase property coverage on an agreed value basis.
Some insurance corporations have
a coinsurance clause that requires rental property owners to carry a minimum amount of coverage.
It does not affect
the Coinsurance clause of your insuring contract
The Agreed Value Option is an excellent tool for policy holders to avoid the penalty of
the coinsurance clause in both property and business income insurance.