sharing of an insurance risk, common when claims could be of such size that it would not be prudent for one company to underwrite the whole risk. Typically, the underwriter is liable up to a stated limit, and the coinsurer's liability is for amounts above that limit.

Policies on hazards such as fire or water damage often require coverage of at least a specified coinsurance percentage of the replacement cost. Such clauses induce the owners of property to carry full coverage or close to it.