Coinsurance
The percentage of covered medical or property costs a policyholder pays after meeting the deductible.
What is Coinsurance?
Coinsurance is the cost-sharing arrangement in which a policyholder pays a fixed percentage of covered expenses after satisfying the deductible, while the insurer covers the remaining portion. In health insurance, a common split is 80/20: the insurer pays 80% and the policyholder pays 20% until the out-of-pocket maximum is reached. In property insurance, coinsurance clauses require property owners to insure their property to at least a specified percentage of its replacement value — typically 80% — or face a coinsurance penalty that reduces any partial-loss claim proportionally.
Example
A patient with an 80/20 health plan incurs $5,000 in covered medical bills after meeting a $1,000 deductible. The insurer pays 80% of $5,000 ($4,000) and the patient pays 20% ($1,000 coinsurance), bringing their total out-of-pocket cost to $2,000 for the year. Once the out-of-pocket maximum is reached, the insurer covers 100% of additional covered costs.
Source: Centers for Medicare & Medicaid Services — Coinsurance