Your policy contains what is called a coinsurance provision.  Coinsurance is essentially an agreement between you and the insurance company.  In exchange for your agreement to insure the property for at least a specified percentage of its actual value, the company agrees to issue the policy for a lower premium than it would charge for a policy without a coinsurance provision.  After a loss – even a small loss – if the amount of insurance on your property isn’t sufficient to satisfy your part of the agreement, then the insurance company can reduce the amount it would normally pay. 

Whose Job Is It to Determine the Proper Amount of Insurance?

Ultimately it is your responsibility to establish the value of your property and select the amount of insurance for your policy.  We can help with that decision and explain what you can do to avoid an unpleasant surprise after a loss.

This educational article is provided courtesy of KHT Insurance. It is intended to provide general educational knowledge only. If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply. You should always discuss any insurance decision with a licensed agent. 

KHT Insurance: (817) 336-2121 or (800) 814-6470