Newspaper article Coffs Coast Advocate (Coffs Harbour, Australia)

Coinsurance the Santa Clause

Newspaper article Coffs Coast Advocate (Coffs Harbour, Australia)

Coinsurance the Santa Clause

Article excerpt

INSURANCE MATTERS

KEN PHILLIPS

INSURING your business property for its true replacement value may seem like commonsense, but it's all the more important due to a frequently misunderstood clause called coinsurance.

On any replacement costs over and above what your property insurance covers, you become a coinsurer.

Imagine the unfortunate position of watching fire- fighters quash flames around your showroom, then the conversation you'll have with yourself if you're underinsured.

It's probably not printable but less so if you're trying to also get your head around the definition of a coinsurance clause in the same moment.

The clause requires you to carry insurance equal to, or greater than, the stated coinsurance percentage of the insurable value of the covered property.

Not to be mistaken for the theory of relativity, the math is in fact quite simple.

Let's say the full replacement cost of your property is $100,000 but you've bought a sum insured of only $50,000. …

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