Model coinsurance outcomes using realistic policy details. See penalties, shortfalls, and payout splits instantly. Make coverage decisions with confidence and clarity today.
| Scenario | Value | Co% | Carried | Loss | Payable% | Basis | Penalty? | Est. Insurer |
|---|---|---|---|---|---|---|---|---|
| Meets requirement | $500,000 | 80% | $450,000 | $100,000 | 100% | RC | No | ≈ $99,000 |
| Underinsured + cap | $500,000 | 90% | $300,000 | $120,000 | 100% | RC | Yes | ≈ $84,000 |
| ACV with 25% depreciation | $500,000 | 90% | $300,000 | $120,000 | 100% | ACV | Yes | ≈ $63,000 |
1) Adjusted property value (optional):
Adjusted Value = Property Value × (1 + Inflation Guard)(Months ÷ 12)
2) Required coverage:
Required Coverage = Adjusted Value × Coinsurance %
3) Payable loss modeling:
Covered Loss = Gross Loss × Loss Payable %
Payable Loss = Covered Loss × (1 − Depreciation) (ACV only)
4) Coinsurance penalty (if applicable):
Coverage Ratio = Coverage Carried ÷ Required Coverage
Base Payment = Coverage Ratio × Payable Loss
5) Penalty cap (optional):
Base Payment = max(Base Payment, Payable Loss × Penalty Cap %)
6) Pro‑rata sharing (optional):
Share Ratio = Carried ÷ (Carried + Other Insurance)
Shared Payment = Base Payment × Share Ratio
7) Limits and deductible (order selectable):
This calculator is for education and planning. Actual claim settlement depends on policy language, valuations, endorsements, and coverage conditions.
The calculator computes a coverage ratio as Coverage Carried ÷ Required Coverage. When you carry less than required, the payable loss is multiplied by this ratio before other adjustments. For example, if required coverage is $400,000 and carried coverage is $300,000, the ratio is 0.75 and a $100,000 payable loss begins at $75,000. A ratio above 1.00 removes the penalty, but payments still follow limits and deductibles.
With inflation guard, the property value is projected using (1 + annual rate)^(months/12). A 4% annual guard over 18 months increases a $500,000 value to about $530,000, raising an 80% required coverage from $400,000 to roughly $424,000. This change alone can trigger a penalty if coverage is not updated. Tracking valuation dates helps explain why the same policy can behave differently year to year.
The loss payable percent models partial coverage or sublimits. If gross loss is $120,000 and payable percent is 85%, covered loss becomes $102,000. Under an actual cash value basis, depreciation further reduces the payable loss: at 25% depreciation, $102,000 becomes $76,500 before coinsurance, sharing, limits, or deductible. Use this section to separate “loss size” from “covered loss,” especially for mixed damage types.
When pro-rata sharing is enabled, the tool applies Carried ÷ (Carried + Other Insurance). If carried is $300,000 and other insurance is $200,000, the share ratio is 60%. A $90,000 base payment becomes $54,000 before limits and deductibles, clarifying why total recovery may depend on multiple policies. The waterfall chart highlights this reduction as a separate step for easier reconciliation.
Some programs soften coinsurance impacts. The waiver threshold can skip penalties for small payable losses (e.g., losses under $5,000). The penalty cap sets a minimum payout percentage of the payable loss during underinsurance; a 70% cap prevents a ratio-driven payout from falling below 70% of payable loss, subject to limits and deductibles. Testing several cap values helps quantify how endorsements can stabilize outcomes during short-term underinsurance. It also supports quick checks before renewing or increasing limits annually.
Coinsurance requires carrying a percentage of property value as insurance. If you carry less than required, the insurer may reduce the claim payment proportionally using a coverage ratio.
The penalty applies when coverage carried is below required coverage and no waiver is active. Selecting agreed value or using a waiver threshold can prevent the penalty in the calculation.
Payable loss percent models partial coverage, sublimits, or coverage conditions. It reduces the gross loss to a covered-loss amount before applying coinsurance, sharing, limits, and deductible.
Actual cash value applies depreciation to the covered loss. The calculator reduces payable loss by the depreciation percent, then applies coinsurance and other adjustments to that smaller payable amount.
Pro-rata sharing allocates payment based on your policy’s share of total insurance. The tool multiplies the base payment by Carried ÷ (Carried + Other Insurance) when enabled.
No. Exports are planning outputs based on inputs and simplified rules. Actual settlement depends on policy wording, valuation methods, endorsements, exclusions, and the adjuster’s documentation.
Important Note: All the Calculators listed in this site are for educational purpose only and we do not guarentee the accuracy of results. Please do consult with other sources as well.