Home  | Term of the Day | |||
| coinsurance [list="padding:0 0 0 19px"] [*]An insurance policy provision under which the insurer and the insured share costs incurred after the deductible is met, according to a specific formula. [*]More generally, a sharing of risk between the insurer and the insured. also called copay. [/list] | ||||
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| Usage Example Insurance creates moral hazard, i.e. the insured may undertake risky actions knowing that somebody else is paying, but this can be reduced by a coinsurance arrangement whereby the insured is penalized financially for this behavior, resulting in a lower premium. | ||||
Term of the Day
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