The goal of coinsurance requirements is to?

The goal of coinsurance requirements is to encourage policyholders to insure a higher percentage of the property's value. This principle aims to ensure that property owners do not underinsure their assets, which can lead to significant financial losses in the event of a claim. By requiring policyholders to insure a specified percentage of the property's true value, insurers promote a more equitable distribution of risk and prevent situations where policyholders might only insure a fraction of their property's worth.

This requirement not only helps protect the insurer from underinsurance but also incentivizes policyholders to reflect the actual value of their assets in their insurance coverage. Consequently, if a loss occurs, the policyholder will be better positioned to recover adequately based on the full extent of their loss rather than facing a shortfall due to insufficient coverage.