Coinsurance is a simple principle. It means that in order for you to receive a certain value in the event of a loss, you must insure to that value. However, it is understood that market values and replacement costs change over time. Therefore, there is a minimum threshold you must maintain. That is typically 80%. Anything less than that, and a loss would result in an insurance payment of a fractional value based on your insured level.

An agent with one or more "ethical flaws" can make a quote look good to you if they underinsure your property, that is, set a value at below market and/or replacement cost. Over the past few years, this has become a real problem in some areas. The unsuspecting client who took a policy written this way suddenly found themselves on the short end at the time of loss. For example, a total loss on a $200,000 property might get a claim of only $100,000 if it is determined that they were only insured at 50% of value.

Protect yourself. Make sure your insured value is realistic. Most policies carry automatic annual inflation protection to prevent you from becoming underinsured over time.

We use several different carrier approved value estimators. As long as you have this as back-up, you are safe.