I was under the impression that the "co-insurance clause" doesn't care what "survived"
I was always led to believe that the co-insurance clause "cared" whether you carried sufficient coverage based on the value of the insured property "as a whole"
So.. given tpcook's example of a $625 home carrying $500 coverage
Let's assume the cistern and slab is worth $150 of the $625... damage (and let's just assume rebuilding) costs are $625-150=$475
.... I felt... say, under 80% coinsurance... you were good and covered (minus deductibles)
Your concept of "what survived" versus the "co-insurance clause" has me confused - as it seems to be separate issues
... but, I am not in the insurance business
Assume the following:
Value of the dwelling: $1,000,000
Coinsurance: 80%
Required Insurance: $800,000
Insurance limit carried: $500,000
Damage: $800,000
Divide the limit of insurance $500,000 by the Required Insurance $800,000 = 62.50% Recovery Percentage
Multiply the amount of damage $800,000 by the Recovery Percentage 62.50% = $500,000. The insured is paid the policy limit.
If the amount of damage is changed $700,000 the insured only recovers $437,5000.
So you don't need to have a total loss to recover the policy limit you need to have an 80% loss or 20% value remaining.
