Connect the policy to the property
Coinsurance provisions can reduce a covered claim when the carried amount is below the required percentage of value at the time of loss. An agreed-value provision may suspend a coinsurance condition for a stated period when its requirements are met, but it does not remove policy limits or guarantee that every value is adequate.
Risks to review
- Values rising during the policy term without a corresponding limit review
- Expired or incomplete agreed-value documentation
- Blanket limits that do not match the location schedule or loss scenario
- Assuming only total losses are affected by underinsurance
Information to prepare
- Current statement of values and valuation methodology
- Coinsurance percentage, agreed-value endorsement, and expiration date
- Location limits, blanket limits, margin clauses, and deductibles
- Renovations, acquisitions, inventory peaks, and equipment changes
Frequently asked questions
Can coinsurance reduce a partial loss?
Yes, depending on the form. The carried-to-required ratio may be applied to a covered partial loss before the deductible.
Does agreed value mean the insurer agrees to pay that amount?
Not necessarily. It commonly affects the coinsurance condition, while covered damage, valuation, limits, deductibles, and other contract terms still control payment.
Coverage descriptions are general. Eligibility, availability, limits, deductibles, valuation, exclusions, and policy terms vary. Actual policy documents control.