What aspect of insurance does the term "Coinsurance" refer to?

• A. The division of claims payments between multiple insurers
• B. The percentage of costs the insured must pay after the deductible
• C. The total insurance amount required for property coverage
• D. The calculation of premiums for insurers

Answer: (B)

The term "Coinsurance" specifically refers to the percentage of costs that the insured must pay after the deductible has been met. In many insurance policies, especially in health insurance and property insurance, coinsurance is a provision that requires the insured to bear a certain percentage of the covered expenses.

For example, if a policy includes an 80/20 coinsurance clause, the insurance company will cover 80% of the costs after the deductible, and the insured is responsible for the remaining 20%. This arrangement is intended to share the risk between the insurer and the insured, encouraging the insured to be mindful of costs and utilize the coverage judiciously.

In relation to the other options, the division of claims payments between multiple insurers typically involves concepts like "pro-rata" or "allocation" rather than coinsurance. The total insurance amount required for property coverage ties into the concept of "insurance to value" or "guaranteed replacement cost" rather than directly to coinsurance. Finally, the calculation of premiums involves underwriting and risk assessment processes, which are separate from how coinsurance operates within the policy. Thus, the focus on the cost-sharing aspect after the deductible is what correctly defines coinsurance.