Definitions for "Coinsurance clause"
A clause in an insurance contract limiting the insurance company's liability when property is underinsured. For example: If you insure a $200,000 building for only $100,000, you will not get fully reimbursed for a loss. If a fire caused $80,000 damage to your $200,000 structure, you would receive a prorated amount based on the extent to which you were underinsured. You would not receive the full $80,000.
1) In property insurance, a clause requiring the insured to maintain insurance at least equal to stipulated percentage of value in order to collect partial losses in full. If the insurance is less than the minimum required, that proportion of the loss will be paid which the amount of insurance carried bears to the amount which should have been carried. Symbolically
A property provision that requires that the policy-holder carry insurance equal to a specified percentage of the property's value (Gallery Association of New York State 1985).