Coinsurance is a common clause in homeowners insurance policies that can impact your claim payout. Here's what Fresno homeowners need to know:
What is coinsurance?
It's a percentage of the property's value that you must insure for replacement cost. Typically, it's 80% or 90%.
How it works:
If your home is worth $500,000 and you have 80% coinsurance, you should insure it for at least $400,000. If you insure it for less, you might face a penalty when filing a claim.
Example:
Home value: $500,000
Coinsurance: 80% ($400,000)
Insured value: $300,000
Damage: $50,000
Penalty: Your insurer might pay less than $50,000 due to underinsurance.
Tips:
- Review your policy's coinsurance clause
- Ensure you're insured for the right amount (consider inflation, rebuild costs)
- Update your coverage if you renovate or upgrade
Have questions about your Fresno home insurance policy?