Which type of insurance policy would typically include a coinsurance clause?

A coinsurance clause is commonly found in property insurance policies. This clause requires the policyholder to insure the property for a specified percentage of its value, often around 80%, 90%, or 100%. If the insured does not meet this requirement and a loss occurs, the insurance payout may be reduced based on the ratio of the amount insured to the amount that should have been insured.

In the context of property insurance, this clause serves to encourage policyholders to provide adequate coverage for their properties. It helps in sharing the risk between the insured and the insurer, promoting financial responsibility for maintaining sufficient coverage. This is particularly important for properties, as underinsurance can lead to significant financial losses if a major event, such as a fire or natural disaster, occurs.

The other types of insurance policies listed do not typically employ a coinsurance requirement in the same way. Liability policies, for example, focus on coverage for legal liabilities rather than property value. Lifelong policies and health insurance policies usually involve different terms and conditions related to coverage limits and deductibles rather than a coinsurance requirement based on property valuation.