What does coinsurance mean?
Coinsurance refers to the sharing of financial risk between an insured party and an insurer, or among multiple insurers. In its most familiar modern use — American health insurance — it denotes the fixed percentage of covered medical costs that a policyholder must pay after meeting the annual deductible; a plan with 20 percent coinsurance, for example, leaves the patient responsible for one-fifth of each covered bill. In property and commercial insurance, coinsurance instead describes a policy clause requiring the insured to insure a stated proportion of the property's value, with penalties applied to claims if this threshold is not met. The term also describes joint underwriting, in which several insurers share one large risk. Technical rather than colloquial, coinsurance matters to anyone comparing health plans or reviewing commercial policies, since misunderstanding it can lead to unexpectedly large out-of-pocket costs.
nounCoinsurance is the sharing of insurance risk between two or more insurers, or, in health insurance, the fixed percentage of covered medical costs that an insured person must pay after meeting their deductible.
- In property and liability insurance: a clause requiring the insured to carry coverage equal to a specified percentage (often 80%) of the property's value, or face a penalty on partial losses.
- In health insurance: the percentage of covered medical expenses the insured must pay out of pocket after satisfying the deductible.
- The practice of two or more insurers jointly underwriting a single large risk, each bearing an agreed share of it.
"After meeting her deductible, Maria's coinsurance required her to pay 20 percent of each medical bill while her insurer covered the rest."
"Because the warehouse was insured below the 80 percent coinsurance requirement, the company received only a proportion of its fire claim."
"Her plan's coinsurance of 30 percent meant she owed nearly a third of the surgery's cost even after her deductible had been met."
Rarely pluralized in practice; the singular form is standard even when referring to multiple policies, since each plan's coinsurance is usually discussed individually.
"The broker compared the coinsurances offered by several carriers before recommending a plan."
That '20% after deductible' line in your health plan? That's coinsurance — and it can quietly turn a routine hospital stay into a five-figure bill.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Etymology of coinsurance
Coinsurance derives from the prefix co- (from Latin com-, meaning 'together' or 'jointly') combined with 'insurance', which itself traces back through Old French enseurer to the Latin securus, meaning 'free from care' or 'safe'. The word emerged in the nineteenth century alongside the growth of modern commercial insurance, when joint underwriting and proportional-loss clauses became standard industry practices. It shares its root with related terms such as insure, assurance, and secure, all ultimately descended from the Latin securus.
Related word forms
How coinsurance is actually used
Coinsurance is a technical term used almost exclusively in insurance, healthcare finance, and legal contexts; it carries no informal register. In American health insurance it is frequently contrasted with copayment and deductible, and consumers often conflate the three. The term is standard in both British and US usage, though the health-insurance sense is far more prominent in American English.
Easily confused with coinsurance
A copayment is a flat fee paid per service (such as $25 for a doctor visit), whereas coinsurance is a percentage of the total cost of a service.
A deductible is a fixed amount the insured pays before coverage begins, whereas coinsurance applies afterward as a shared percentage of remaining costs.