The meaning of the word “coinsurance” actually varies in different areas of insurance. Internationally speaking, coinsurance is regarded as a common contract where two or more insurance companies jointly assume risk based on a percentage. One company is tasked with various aspects of policy administration, from claims and documents to premiums and coverage.
When it comes to health insurance, coinsurance is often used synonymously with copayment. But whereas copayment is often a fixed cost you’re expected to pay at each doctor’s visit, coinsurance is expressed as a percentage of your medical expenses taken care of by your insurer, with the remainder handled as an out-of-pocket expense. If you exceed your out-of-pocket expense cap, the insurer steps in to handle 100 percent of your health care costs until you reach your lifetime cap.
In property insurance, coinsurance is a penalty imposed by the insurance carrier in the event that the insured under-reports or under-insures the value of commercial income or tangible property. Carriers determine this penalty by calculating the actual value, declared value and the amount of the resulting loss against a set coinsurance percentage. This percentage usually varies between 80 percent to as high as 100 percent.
We regularly help Burlington, North Carolina residents find valuable solutions for their insurance needs. As your independent agent, we can help you make sense of the seemingly complicated aspects of insurance, from coinsurance clauses to stop-loss policies. It’s important that you get in contact with us so that we can offer you helpful advice for your specific circumstances.