From Gregory Boop,
Your Guide to Business Insurance.
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Definition: Coinsurance is a requirement in a policy that the insured insure a minimum percentage of an asset's value. It is called coinsurance because if the insured fails to purchase the required policy limits as required they become a "co-insurer" on any loss.

Examples: A property policy with an 80% coinsurance requirement would mean the policy holder must purchase a minimum of $80,000 in coverage on property worth $100,000 (80% of $100,000 = $80,000).