Assume Karen Francis Had A Homeowner's Insurance Policy With $150,000?

Assume Karen Francis had a homeowner's insurance policy with $150,000 of coverage on the dwelling. Would a 90% co-insurance clause be better than an 80% clause in such a policy? Give reasons to support your answer.
Posted: August 12, 2013

Best Answer

coinsurance is a device used primarily in property policies whereby an insured agrees to cover property to a certain percentage of either its actual cash value or its replacement cost. Actual cash value being defined as replacement cost less physical depreciation. Rarely see it anymore in a homeowners form...generally as the agreement gets closer to 100% of either the ACV or Replacement cost the insured is given a lower rate so the rate may be say 5% less at 90% co and 10% less at 100% co. If you do not have the proper percentage and suffer a partial loss you may suffer a penalty on a claim based on the amount insured vs the amount you should have insured times the amount of loss. So say the replacement value is 200,000 and your policy limit is 150,000. At 90 % co you had agreed to cover 180,000 ie .90 x 200,000, at 80% co you agreed to 160,000 each would result in a penalty . The trade off is at 90% your rate should be lower.

Related Questions

2+
answers
An Insurance Claim Scenario
Let's say I was waiting at a red light in my car and another car crashes into me (at no fault of my own) and causes $8000 in damage to my car. My two questions ...
May 10, 2013
1+
answers
I Have A Question About Insurance...?
My mom took out an insurance policy on me a long time ago. I'm 19 now, and I was wondering if I can cancel hers and get my own, even though she's paying for it....
May 20, 2013
3+
answers
What Will Happen To My New Car Insurance Policy?
Basically I had car insurance with Tesco and a third party collided into my parked vehicle last year November, the third party admitted liability, however in fe...
May 10, 2013
2+
answers
Will My Parents Auto Insurance Policy Be Cancelled?
My brother who is under my parents car insurance policy has been involved in 2 accidents this year alone. My parents have clean driving records are worried if t...
August 11, 2013
1+
answers
Car Insurance Policy ( Malaysia)?
I have a question . My vehicle's recommended value by the insurance company is RM85,000 while the market value is RM77,000.00. As such when i renew the policy, ...
May 29, 2013
4+
answers
Is It Possible To Look Up My Home Insurance Information Without A Policy Number?
A little over a year ago I purchased a home owner's insurance policy through a local agent. Now that it should be time to renew the policy I can't seem to loca...
June 14, 2013
5+
answers
Need To Change Insurance Details But I'm Not Main Policy Holder?
My insurance is with admiral and is a multicar policy for mine and both my parents cars and my mum is the main policy holder. I've just bought a new car which...
May 19, 2013
4+
answers
On A Real Estate Rent-to-own Contract, How Should Homeowner's Insurance Be Handled?
We are renting out a house where the tenant's rent applies to the purchase price. We want to make sure the insurance stays paid. Are there special policies that...
May 10, 2013
2+
answers
On A Real Estate Rent-to-own Contract, How Should Homeowner's Insurance Be Handled?
We are renting out a house where the tenant's rent applies to the purchase price. We want to make sure the insurance stays paid. Are there special policies that...
May 10, 2013
3+
answers
Homeowner's Insurance Asking For Id?
One other person and I rent a room in a private owner-occupied house. The owner/landlord just died and the other tenant and I are still living here until the...
May 20, 2013
18+
answers
Does Obamacare Do Anything About Insurance Companies Doing This?
My boyfriend's insurance (Blue Care) through his job has a policy where if your spouse is offered insurance at their job and doesn't take it, the rates are incr...
May 29, 2013
3+
answers
Are Home Insurance Companies Such As State Farm Supposed To Remind You Occasionally To Update Your Policy?
We were robbed of the jewelry in the house and the last time we went over the home insurance policy was when it was created in 2005. The problem is that we came...
May 10, 2013
3+
answers
Named Driver To My Own Policy?
Heya, For as long as I've been married I have been a named driver on my husband's insurance policy. I have never had an accident in the car (a people carrier...
May 20, 2013
2+
answers
Business Insurance Was Just Cancelled
My business insurance was just cancelled, the apparent reason for this was due to me according to the notice "cancelling my auto insurance for the business" but...
May 10, 2013
1+
answers
Cheapest Insurance
Hi. My dad has been having AAA as his insurance for $82, compared to our other family members insurance, that is pretty over priced. Isn't the insurance price s...
May 20, 2013

Page Loaded:0.04