coinsurance
Noun: 1. A type of insurance in which two or more insurers jointly share the risk and coverage of a single policy. This arrangement spreads the financial liability among multiple parties. 2. The joint assumption of risk by the insured and the insurer, often specified as a percentage (e.g., 80/20). In this common healthcare context, it refers to the portion of costs a policyholder must pay after meeting a deductible, with the insurance company paying the remaining percentage.
- Coinsurance is a fundamental concept in property, liability, and health insurance contracts.
- It is used to describe both the structure of an insurance policy and the specific cost-sharing requirement for the insured individual.
- The term specifies the division of financial responsibility.
Describing Shared Underwriting:
- The massive construction project required coinsurance from several major syndicates to cover the potential losses.
- The policy was written on a coinsurance basis, with three different companies listed on the document.
Describing Policyholder Cost-Sharing (Common in Health Insurance):
- After I meet my deductible, my plan has a 20% coinsurance rate for specialist visits.
- You are responsible for a coinsurance payment of 30% for this procedure, and your insurer will cover the other 70%.
- Coinsurance Clause: A provision in a property insurance policy that requires the policyholder to carry insurance equal to a specified percentage (e.g., 80% or 90%) of the property's value. If this requirement is not met, the insurer may reduce the amount it pays on a claim.
- Because he didn't meet the 80% coinsurance clause, the insurance company did not pay the full cost of the fire damage.
- Coinsurer (Noun): An insurer that shares the risk under a coinsurance agreement.
- Each coinsurer is liable only for its proportionate share of the loss.
- Joint insurance
- Shared-risk insurance
- Cost-sharing (specifically for the policyholder's portion)
The term "coinsurance" has two distinct but related applications: 1. Industry/Underwriting Perspective: The primary definition involves multiple insurance companies jointly underwriting a single risk. 2. Policyholder/Consumer Perspective: The most frequent modern usage, especially in American English, refers to the percentage of costs a patient pays for covered healthcare services after the deductible is met. It is crucial to understand which meaning is intended based on context.
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insurance issued jointly by two or more underwriters
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