What Does Waiver of Coinsurance Clause Mean?
A waiver of coinsurance clause in an insurance contract relieves the policyholder of the obligation to pay for coinsurance in the event of a total loss. Often in property insurance contracts, a policyholder will only receive 80-90% coverage from a property insurance company, and they will be responsible for the rest through coinsurance. However, a waiver of coinsurance clause waives this responsibility.
Insuranceopedia Explains Waiver of Coinsurance Clause
The policyholder will often have to pay a higher premium to get a waiver of coinsurance clause on a property insurance policy. This is because it puts more responsibility on the insurance company. Properties are often worth a significant amount of money. For example, a house or building could be worth hundreds of thousands or even millions of dollars. Because properties can have such a high value, a waiver of coinsurance clauses can actually be extremely important and relevant for payouts in the event of a total loss.