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Shannon Brinson
on Nov 23, 2024

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A building worth $200,000 sustains $10,000 in damage. It was covered by a $120,000 policy with an 80% co-insurance clause. The indemnity paid by the insurer will be $7,500.

Co-insurance Clause

A provision in insurance policies that requires the policyholder to bear a portion of the costs of a claim, promoting shared risk between the insurer and the insured.

Indemnity

A contractual agreement in which one party agrees to compensate another for losses or damages incurred.

Damage

Harm or injury that reduces the value or usefulness of something, which can be physical, financial, or reputational in nature.

  • Understand the impact of co-insurance clauses on claims and indemnity payments.
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Ayanna HolderNov 28, 2024
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