What does 80% co-insurance mean?

​Insurance carriers require that an insured party insure at least 80% of the property's value in order to collect a partial loss in full. 

This is the way the insurance company encourages all insureds to adequately insure their property in relation to other insureds.

This also applies if you want replacement cost instead of actual cash value on your property.

If the amount of insurance is less than the co-insurance requirement then the insurance company will only pay the percent of the loss that the insured had in relation to the amount of insurance that should have been carried.

Consider this formula for that last statement…

(Insurance carried/ Insurance required) x Loss amount = Loss payment