What must a client ensure regarding their insurance to avoid issues with coinsurance?

To avoid issues with coinsurance, the client should carry adequate insurance, which means that the policy limit should be sufficient to cover a specific percentage of the property value. Coinsurance is a provision in property insurance policies that requires a policyholder to insure their property for a certain percentage of its value, typically 80%, 90%, or 100%. If the insured amount falls below this required percentage, the policyholder may face penalties in the event of a loss, resulting in reduced claims payouts.

Having adequate insurance ensures that the client meets the coinsurance requirement, thereby avoiding the risk of underinsurance and the financial implications that can arise from it. For instance, if a client has a property valued at $200,000 but only carries $100,000 in insurance, they might be subject to significant out-of-pocket costs if a total loss occurs, as the policy would not provide sufficient coverage according to the coinsurance clause.

Other options, while important, do not directly address the specific issue of coinsurance. Renewing insurance annually, ensuring timely premium payments, or having a policy limit equal to the value of the property may contribute to overall policy maintenance but do not inherently resolve coinsurance concerns. Adequate coverage directly addresses the need to comply with