Coinsurance penalty

Did-vs-should ratio and penalized payable.

Checks whether a policy carries enough limit to satisfy its coinsurance clause and, when it doesn't, computes the penalized claim payment: (did carry ÷ should have carried) × loss, less the deductible, capped at the limit.

Inputs

Property value at loss ($)

On the valuation basis the policy uses (RCV or ACV).

Coinsurance requirement (%)

Limit of insurance carried ($)

Loss amount ($)

Deductible ($)

Result

Enter values above to calculate.

Illustration of the standard coinsurance formula — policy wording controls. Not a coverage determination.