Have you heard of co-insurance? You should as its built into most policies you purchase and can have a huge impact on your claim payout. This is one of those hidden clauses to your insurance contract that's explained in the policy booklet possibly buried on page 9062 and one you may not understand even after reading. So what is co-insurance? Co-Insurance is basically what you should have carried divided by what you did carry to determine if your coverage is sufficient to pay out at the policy limit. If you carried less then your co-insurance percentage limit then for every percentage you are below that limit the carrier can knock that same percentage off your claim check - make sense? Probably not.. Basically if you under insure your home your insurance company imposes a “coinsurance penalty” once a claim is filed.