Commercial Property Coinsurance Penalty & Agreed Value Calculator
Simulate partial property losses, examine Did / Should underinsurance ratios, and calculate out-of-pocket penalties when policy limits fall below statutory coinsurance thresholds.
Under ISO Commercial Property Form CP 00 10 §F.1, a coinsurance penalty is calculated using the formula:Payment = [(Limit Carried ÷ (Replacement Cost × Coinsurance %)) × Covered Loss] - Deductible
Commercial property coinsurance penalties enforce accurate valuation reporting at policy inception. If an insured carries a $1,200,000 building limit on a $2,000,000 property with an 80% coinsurance requirement ($1,600,000 'Should'), the recovery ratio is 75% ($1.2M / $1.6M). On a $400,000 fire loss with a $10,000 deductible, the insurer pays $290,000 and the insured suffers a $110,000 out-of-pocket penalty. Attaching ISO CP 19 10 Agreed Value completely waives this condition.
Coinsurance Penalty Applied (Underinsured)
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Verify replacement cost valuations, audit 80%/90% coinsurance requirements, and check CP 19 10 Agreed Value suspensions in seconds with Becky's Inbox.