An amount specified by your insurance provider that you must pay over and above your deductible before your insurance company pays its share of the bill. Coinsurance represents a percentage of the total amount due once you’ve covered your deductible.
In property insurance, your coinsurance is a certain percentage of your total property value, whereas in health insurance, it is a percentage of each claim filed.
For example, if you hold an 80/20 health insurance policy, you’re required to pay your deductible on each claim filed plus 20 percent of covered losses—while your insurance company covers 80 percent of each claim up to a specified ceiling. Once that ceiling is reached, your insurer will begin paying 100 percent of your claims on its own.
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