April 8, 2022
If a storm or fire damages a home, the homeowner will file an insurance claim with his homeowners’ insurance company. An adjuster comes to inspect the damaged real estate. Later the insurance company confirms the amount of the loss. However, the company tells the homeowner that the claim payment will be reduced by a coinsurance penalty. The homeowner asks himself: what is coinsurance in a homeowners’ policy?
What is coinsurance in a homeowners’ insurance policy?
Most homeowners’ insurance policies have coinsurance clauses. As such, these clauses are meant to protect insurance companies. The coinsurance requirement makes the homeowner buy the correct amount of insurance coverage for his home. It ensures that the insurance company receives the correct amount of premium payments relative to the risk it is assuming by insuring the home.
This means if the homeowner’s home is worth $1 million, he must buy $1 million in insurance coverage. For instance, that homeowner cannot pay $500,000 in insurance to cover a home with a $1 million replacement cost.
The homeowner must buy insurance coverage at least equal to 80 percent to 100 percent of the value of the home, depending on the company.
Consequently, if the homeowner purchases an amount of insurance below the percentage in the coinsurance provision, he becomes a coinsurer with the insurance company.
How Does the Coinsurance Clause Work?
While it sounds somewhat complicated, coinsurance is simple to understand in practice. For instance, in the $1 million home example, the homeowner only purchased $500,000 in loss recovery protection. Furthermore, his homeowners’ company had an 80% minimum coverage requirement in its coinsurance clause.
Therefore, the insurance company would consider him a coinsurer for 50% of any insurance claims he submitted ($500,000 of insurance protection on a $1 million home equals 50%).
As a result, if a storm does $80,000 in damages to this homeowner’s home, the coinsurance percentage would apply. Therefore, the insurance company would only pay 50% of the claim, or $40,000.
Conversely, if the building had been insured at or above 80% of its current value, the homeowner would have been fully covered. As a result, he would have received $80,000
If You Are Having a Coinsurance Issue with Your Homeowners’ Insurance Company, Call AllCity Adjusting
We are a family-owned claims company with five decades of combined adjusting experience. As a result, if there’s one thing we understand, it’s that you need 100% of your claim value.
At AllCity Adjusting we work to ensure you get 100% of your damage claim value. Equally important, with over 50 years of combined adjusting experience, we know insurance companies and understand where they cut corners.
Don’t Let your Homeowners’ Insurance Company Push You Around
If you are having a problem with your homeowners’ insurance company over coinsurance, call AllCity Adjusting first. We are experts on insurance policies. We can tell you if your insurance company is making a mistake.
As another example, we can tell you if your insurance agent made e a mistake in reporting the value of your home to the carrier.
Therefore, if you have received a low-ball offer from the insurance company because of a coinsurance issue, call us at 844.692.3587. Or you can email us at firstname.lastname@example.org.
Best way to beat the insurance company is to hire AllCity Adjusting
At AllCity Adjusting we help residential and commercial clients alike get the claims support they need. Moreover, we have over 50 years of combined experience helping get our clients the max settlement time and time again. If your claim has been low balled or denied entirely we can help increase your maximum settlement. Call us today for a FREE consultation. Experience the AllCity difference.
Real Support When You Need It!
Let’s say you had a small fire in your home. Faulty electrical wiring caused the fire. Of course, someone will have to tear down parts of the wall where the fire started. Then someone will have to hang new sheetrock and paint it. You’re pretty handy around the house. You’re thinking, should you make your own insurance claim repairs? Is there any way to get your insurance claim check faster?
Certainly, almost all businesses, from large corporations to mom-and-pop stores, will probably face some type of accident or incident that will become an insurance claim. Below we will discuss some common business insurance claims that businesses across the country must confront.Is there any way to get your insurance claim check faster?
Homeowners’ insurance will cover damage from unexpected and sudden perils, like hurricanes, fires, and hail. However, it excludes insurance coverages if the damage stems from everyday use and wear and tear to appliances, HVAC systems, etc. Therefore, if you feel you need insurance coverage for those items, you need to know the answer to the question: how does home repair insurance work?
Your roof is the primary protection for your home from the elements. Of course, the wind is probably the most dangerous element to your roof. However, roofs also get damaged by falling trees, electrical poles and wires, hail, and heavy snow. If a storm or some other unexpected event damages your roof, you will have to know how to file a roofing insurance claim.
Homeowners’ insurance protects homes from damages caused by fire, hurricanes, windstorms, and other natural disasters. However, standard homeowners’ insurance does not cover damages caused by floods. Consequently, homeowners and renters who live in a high-risk zone for flooding need to know how to get flood insurance.
If you have found mold in your business, you should be concerned. For instance, properly removing mold can be expensive and difficult to do correctly. Mold in your business can be dangerous for your health, and that of your employees, customers and visitors. However, commercial mold cleanup and restoration is necessary if you want to keep operating your business.
Stay Up to Date With The Latest News & Updates
Don't Wait - Get More
Get a free 1 hour consultation on your next call. So call today and challenge the insurance company narrative on your policy claim. We can help you with all your public adjuster claims support. Let us help you get more.
Join Our Newsletter
Do you want to learn more about public adjusting. In this newsletter we create helpful tips and hints and you will receive notifications when we post new articles.
Follow us on the following social networks.