Definition - What does Co-insurer mean?

A co-insurer is an insurer that provides additional coverage to a policyholder even though that person already has insurance coverage from a primary insurer. In these situations, the co-insurer often provides a lower amount of coverage so that the policyholder benefits from extra protection in case the primary coverage is expended after a substantial loss.

Insuranceopedia explains Co-insurer

The benefit of co-insurers is that they take supplement the coverage provided by a primary insurer. This is especially important for large claims. For example, if a building in a war-torn country is destroyed, a co-insurer would prevent one insurance company from having to shoulder the full cost. On the other hand, however, this means that the policyholder must pay premiums to at least two different companies. Therefore, co-insurers take some of the profits as well as some of the responsibilities.

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