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Related to Coinsurance: Coinsurance effect


In insurance, a structure in which the policyholder and the insurer split the responsibility for paying for covered items. Coinsurance is most common with health and real estate insurance. For example, if a policyholder has surgery that is covered under the plan, coinsurance might require the policyholder to pay 20% and the insurer to pay the remaining 80%. This helps the insurer control costs by avoiding flippant claims, but also provides most of the coverage needed for the policyholder.


When your healthcare insurance has a coinsurance provision, you and your insurer divide the responsibility for paying doctor and hospital bills by splitting the costs on a percentage basis.

With an 80/20 coinsurance split, for example, your insurer would pay 80%, or $80 of a covered $100 medical bill, and you would pay 20%, or $20.

Some policies set a cap on your out-of-pocket expenses, so that the insurance company covers 95% to 100% of the cost once you have paid the specified amount.

Coinsurance may also apply when you buy insurance on your home or other real estate. In that case, insurers may require you to insure at least a minimum percentage of your property's value -- usually about 80% -- and may reduce what they will cover if you file a claim but have failed to meet the coinsurance requirement.

Coinsurance also describes a situation in which two insurers split the risk of providing coverage, often in cases when the dollar amount of the potential claims is larger than a single insurer is willing to handle. This type of coinsurance is also called reinsurance.


A method of dividing financial responsibility for a loss between the owner and the insurance company.Coinsurance clauses exist within insurance contracts as a type of penalty for an owner who decides to gamble about the size of any potential loss and insure property for less than the full value in order to keep premiums low.They usually provide that an owner may not collect full policy limits for a loss unless the property has been insured to at least 80 percent of its value.
References in periodicals archive ?
Also in the pre/postsample, we examine categorical variables stating whether, for inpatient care or office-based professional care, the plan required copayments and coinsurance, only copayments, only coinsurance, or neither, comparing pre- to postparity use of cost-sharing features.
Researchers noted that if the coinsurance was waived but there was no follow-on increase in the screening rate, the benefits of screening would not change, but the total cost of screening and treatment would increase to $2.
a) We will not pay the full amount of any loss if the value of covered property at the time of loss times the coinsurance percentage shown for it in the declarations is greater than the limit of insurance for the property.
The amount of insurance should equal the coinsurance percentage times the coinsurance basis or the estimated maximum possible loss, whichever is greater.
An annualized coverage amount needed still must be calculated, but coinsurance is then waived in favor of the monthly limit on payouts.
The deductible versus coinsurance choice also affects the size and frequency of claims, which may affect the administrative costs associated with claims payments.
The provider relations representative again advised it was impossible to know what was owed until the claim was processed, but that the amount paid would be based upon coinsurance and deductible.
In practice, a single insurer will frequently offer some policies with deductibles, other policies with coinsurance (i.
Many cite the coinsurance aspect, which they say requires a patient to pay a percentage of the total healthcare cost rather than a set copayment.
Under P, covered expenses are those that would otherwise be covered by the group health plan, but for which no benefits are paid due to the group health plan's deductible, co-payment and coinsurance provisions.
The MHPA still allows day limits for inpatient or outpatient care, higher deductibles or coinsurance, and restrictions on prescription drugs.
1 million in coinsurance and deductibles for these erroneous payments.