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Related to co-insurance: reinsurance


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 ?
If Martin is in Texas, virtually no plans cover mental health treatment, and for those few that do, they carry combined co-insurance, deductibles and out of pocket (OOP) limits that would cost Martin as much as $10,000 a year, obviating the role of his insurance.
Beneficiaries pay co-insurance after the first 20 days of a Medicare-covered nursing home stay.
Patients with incomes under 100% Federal Poverty Level ($776 monthly for one; add $265 for each additional family member) get charged a 5%-of-retail-price co-insurance while using their $600 allowance to buy prescriptions; those with incomes from 100% to 135% get charged a 10% co-insurance.
Smaller firms are more aggressively exploring models such as health reimbursement arrangements, co-insurance arrangements and professional employer organizations.
Liberty Mutual also argued that Con Edison's "self-insurance" should be considered co-insurance with Liberty Mutual's policy.
Specific Negotiating Points: Some insurers are seeking to reintroduce co-insurance into their new policies, a provision they dropped doing during the soft markets of the late 1990s.
Proper replacement cost and actual cash value evaluations are critical because commercial insurance contracts include co-insurance clauses.
Try to have your policy written without a co-insurance clause.
The current structure of deductibles and co-insurance has not been updated since Medicare began and thus does not reflect the current cost-sharing structures found in other health plans.
The co-insurance clause of gross earnings forms must be understood.
2) HUD turned to private companies to screen applicants for a co-insurance program, in which HUD bore 80 percent of the financial risk.