Coinsurance Risk:

Protect Your Property from Penalties

Don't let coinsurance risk drain your finances. Some property insurance policies require you to maintain coverage equal to a specific percentage (typically 80% or 90%) of your property's value. Falling short of this requirement can lead to severe penalties, even in the case of a partial loss.

Coinsurance Penalties at a Glance

Years ago, you bought a building for $1 million and insured it for $900K. The building now has a replacement cost of $2.7 million, but the insurance coverage hasn’t changed. According to co-insurance laws, you would only receive one-third of any claim since the building is insured for one-third of the replacement cost ($900K vs $2.7M). If a kitchen fire caused $300K in damage, you would collect $100K, less your deductible. With a $10K deductible, you would pay $210K out of pocket.

If you experience a total loss, you’ll only receive the insured amount, minus your deductible. Ensure your coverage matches your property’s value to avoid being underinsured.

Calculate Your Estimated Risk

Test out your own scenario by using our calculator below:

Backed by 45+ years of experience serving NYC-area property owners, this 68-page book will help you . . .

Don’t Take Chances with Coinsurance. Get a Free Policy Review Today

Lower premiums may sound appealing, but the potential penalties can be steep. Request a policy review now to guarantee your property is adequately protected.