What additional costs might "coinsurance" involve for the policyholder?

Coinsurance is a provision in many insurance policies, including health and some property insurance types, where the policyholder agrees to pay a certain percentage of the costs of a claim after the deductible has been satisfied.

In the context of health insurance, for instance, once the insured has paid their deductible, coinsurance kicks in. If a policy has a coinsurance clause indicating that the policyholder is responsible for 20% of the costs of care after the deductible, the policyholder will need to pay that 20% on all covered expenses, while the insurance company pays the remaining 80%. This ongoing financial responsibility can lead to significant out-of-pocket costs for the insured depending on how much healthcare they require after their deductible is met.

This understanding highlights the nature of coinsurance as it relates specifically to ongoing costs that can impact the policyholder financially, unlike initial premiums or one-time charges such as policy approval fees.