By penalizing you at claim time for insuring the building for less than it is worth. A coinsurance clause requires the limit to equal a stated percentage of the property’s value, often 80, 90, or 100 percent. Fall short and the insurer pays only the proportion you did carry, even on a small partial loss. A building worth $1,000,000 insured for $600,000 under an 80 percent clause is carrying 75 percent of what was required, so a $100,000 loss is reduced accordingly. Rising construction costs in California move buildings into breach quietly, without anything changing on the policy.
Related FAQs
It depends on your goals and budget. We recommend you review the tradeoffs with us so there are no surprises at claim time.
Typically your business personal property and any improvements you paid for, since your landlord usually insures the building. We help confirm this against your lease.
It may help replace lost income and cover ongoing expenses while you recover from a covered loss.
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