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Coinsurance explained

Coinsurance is a clause in a property policy, the purpose of which is to encourage insureds to carry limits of insurance that reflect proper values.

The best practice is to carry 100% insurance value at all times.  However, some policies have an 80%, 90% and/or 100% coinsurance clause.  These values reflect the insurance percentage the insurance company expects the client to maintain in order to be fully compensated in the event of a partial loss.  We refer to a partial loss as opposed to a full loss because with anything other than 100% insurance, full losses will not be fully compensated.
A useful formula is the following:  Did / Should X the Loss.
Example:  Full Replacement Cost of the Building is valued at $1,000,000 and the policy carries a 90% coinsurance clause.  However, the building is insured for $750,000.  Clearly, this limit is less than the 90% required. The building has a water damage loss and the cost to repair is $100,000.
Using our formula:  $750,000 (did) / $900,000 (should, $1,000,000 x 90%) x $100,000 (the amount of the loss).   The insured will be compensated for $83,333 rather than the full $100,000.  The penalty for not carrying the minimum 90% to value, in this example is $16,667.   
  • Rasoul K.

    What our clients say

    After talking to many different insurance companies, I spoke to Ensurco New Business Team. They returned my call quickly, provided the best rate and helped me set up a home insurance policy within an hour. Great service!

    Rasoul K.
  • Edward L.

    What our clients say

    I recently sent Ensurco an email requesting changes to my auto policy. I got a quick response. All the changes were completed in a timely manner and I received a detailed email with my billing schedule attached.

    Edward L.
  • Maria L.

    What our clients say

    Amazing staff to deal with. Very fast and efficient. My broker explained the difference between condo insurance and condo corporation insurance.  Thank you!

    Maria L.
  • Michelle B.

    What our clients say

    I was in a time crunch to get an auto application done on a Friday afternoon as I was picking up a new car. I called my customer service rep at Ensurco and she was able to get me a quote, provide an application and even send confirmation to my dealer with a liability slip. Keep up the good work.

    Michelle B.
  • Kelly S.

    What our clients say

    As a high risk driver, I was looking for a good rate as well as good coverage. I spoke to an Ensurco broker who helped me set up a 6 month policy so that I can eventually move to a regular market at less premium. You guys came through when no one else cared.  Thank you so much for your help. :)

    Kelly S.
  • Mark C.

    What our clients say

    When my son and I decided to travel to Calgary for a week, I called my broker at Ensurco who was able to provide me with great coverage at a really good price. I got my travel documents by email within 10 minutes. Exceptional timing!

    Mark C.
  • Don S.

    What our clients say

    Claims service! Most people dread talking to an insurance company or broker to report a claim. But I recently called my insurance broker at Ensurco about a possible water damage claim. He was able to guide me through the process.  The decision was mine as to whether or not I would proceed with the claim.  If so, he explained that he could connect me directly with the insurance company adjuster and resolve the issue. Great advice and great service.  Thanks Ensurco!

    Don S.


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