In property insurance, coinsurance may apply to certain types of coverage, such as water or fire damage. Typically, the policyholder is required to cover a portion of the loss, such as 20%, even if the damage is less than the coverage amount. For example, with $100,000 of fire coverage, if a policyholder’s home suffers $50,000 in fire damage, they would still be responsible for paying $10,000, or 20% of the loss. Coinsurance clauses are also one of the reasons it matters to insure your home close to its full replacement value, which ties into the broader question of whether homeowners insurance covers fire and how much of the loss your policy will actually pay.
Coinsurance
Updated: 17 April 2026
What Does Coinsurance Mean?
Coinsurance is a provision that divides the financial risk between the insured and the insurer. It specifies that both parties will share the cost of a loss based on a predetermined fixed percentage of the coverage amount. This term is commonly used in various types of insurance.
Coinsurance is also referred to as percentage participation.
Insuranceopedia Explains Coinsurance
In health insurance, when the policyholder files a claim on a policy with a coinsurance provision, the insurance company will pay a specific percentage of the approved amount that exceeds the deductible, while the policyholder is responsible for the remaining expenses, including any costs above the approved amount. Coinsurance is one of several out-of-pocket costs that affect what you pay at the doctor’s office, alongside premiums, deductibles, and copays. Knowing how a coinsurance percentage will hit your bill is worth checking before you pick a plan, and it’s one of the factors covered in our guide on how to choose health insurance.
Synonyms
Percentage Participation
