how a waiver of coinsurance clause works
an individual or business with property insurance may receive only 80 coverage meaning they are required to pay the remaining 20 in coinsurance should something happen to their property and they qualify to make a valid claim for compensation a waiver of coinsurance clause relinquishes this requirement for the policyholder to share the burden and pay some of the expenses incurred out of their own pocket generally insurance companies tend to waive coinsurance only for fairly small claims that said in some cases policies may also include a waiver of coinsurance in the event of a total loss the specific language insurance companies use in writing waiver of coinsurance clauses can vary although they all are similar in theory typically consumers can expect to pay higher insurance premiums for policies with a waiver of coinsurance clause as it puts greater liability on the insurance company insurance companies generally only waive coinsurance in the event of fairly small claims example of a waiver of coinsurance clausea waiver of coinsurance clause is particularly valuable to a policyholder in the event of a total loss say a coinsurance clause requires a policyholder to insure a minimum of 80 of the property s actual value thus if a building is worth 200 000 the property owner should purchase at least 160 000 worth of insurance in the event of a total loss the policy would pay out the 160 000 and the building owner would be responsible for the remaining 40 000 that would of course change if the policy included a waiver of coinsurance clause in which case the insurance company would pick up the bill for the entire 200 000 special considerationsas previously mentioned a waiver of coinsurance clause can sometimes be applied to health insurance as well as on the odd occasion to other types of insurance products some health insurance policies are 80 20 plans meaning that the insured is responsible for 20 of medical costs while the insurance company coughs up the remaining 80 provided the client paid the deductible in the rare scenario that a waiver of coinsurance clause is applied it would eliminate the required 20 payment by the insured in specific situations in other words should a patient require an 80 000 surgery a waiver of coinsurance covering that procedure would save the patient from shelling out 16 000 on coinsurance as is the case with property insurance however a waiver of coinsurance in healthcare often covers far smaller amounts they typically come into play when patients pay in advance for specific relatively inexpensive services at the time of their delivery 