80% of the amount to totally rebuild your house or condo unit = the minimumamount of your policy’s Coverage A limit.

Co-insurance penalty: Your claim would be reduced based on the percentage by which the structure was underinsured.

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102-1701-RC (05/17)

What You Don’t Know Can Hurt YouThe Homeowner Policy Co-insurance Clause

Co-insurance Requirement Formula$210,000 ÷ $280,000 = .75 | .75 x $350,000 = $262,500

Example with $350,000 Value Home$350,000

80%$280,000$210,000

Home’s replacement value

Co-insurance requirement amount

Required Coverage A amount

Policy’s actual Coverage A amount

Result: $87,500 in losses not covered by the policy. The homeowner will have to pay this amount, plus the policy deductible, out of pocket.

A fire destroys the home and it must be rebuilt.

$350,000Claim

$70,000 $210,000

Home u

nderinsured by Coverage A amount

the minimum required Coverage A amount

$210,000 is 25% less than $280,000,

$87,500Not covered

$262,500Covered

50% are underinsured by 18% or mor

e

of

underinsured homes

60%of homeowners are underin

sure

d