The total insurable value (TIV) of a property is the maximum amount that an insurer is willing to pay in the event of a total loss. The TIV is determined by the insurer based on the property's value, the policy limit, and the deductible.

### What does 80% coinsurance mean in commercial insurance?

Coinsurance is a type of cost sharing in which the insured person pays a certain percentage of the total cost of a covered service, while the insurance company pays the remaining percentage. For example, if you have a 80% coinsurance clause in your insurance policy, you would be responsible for paying 80% of the total cost of a covered service, while the insurance company would pay the other 20%. Most insurance policies have a coinsurance clause, and the percentage can vary depending on the policy.

Why is insured value higher than market value? The value of an insurance policy is the amount of money the insurer will pay out in the event of a claim. The insured value is usually higher than the market value because it takes into account the cost of repairs or replacement, as well as the policyholder's personal belongings.

##### What is the expected value of an insurable risk?

When we talk about the expected value of an insurable risk, we are referring to the average amount that an insurer can expect to pay out in claims over the course of a policy period. In order to calculate this number, we first need to look at the distribution of possible outcomes for the risk in question. This will give us a range of possible claim amounts, along with the likelihood of each outcome occurring. We can then use this information to calculate the expected value.

For example, let's say that we are looking at the risk of a car accident. We know that the most likely outcome is that no accident will occur, and the second most likely outcome is that a minor accident will occur, causing damage that will cost $1,000 to repair. The third most likely outcome is a major accident, which will cost $10,000 to repair. Finally, the least likely outcome is a catastrophic accident, which will cost $100,000 to repair.

Using this information, we can calculate the expected value of this risk as follows:

(Probability of no accident) x (Cost of no accident) + (Probability of minor accident) x (Cost of minor accident) + (Probability of major accident) x (Cost of major accident) + (Probability of catastrophic accident) x (Cost of catastrophic accident)

= (0.9) x (0) + (0.1) x (1000) + (0.001) x (10000) + (0.00001) x (100000)

= $100

This means that, on average, an insurer can expect to pay out $100 in claims for this risk over the course of a policy period. Of course, it is important to remember that this is just an average, and there is always the possibility of an accident occurring that is much more expensive than the expected value.

What is insured amount? The "insured amount" is the dollar amount that the insurance company has agreed to pay in the event that a covered event occurs. The covered event may be specified in the insurance policy contract, or it may be determined by the insurance company at the time the claim is filed. Does insurable value include depreciation? Yes, the insurable value of a property includes depreciation. Depreciation is a measure of the wear and tear of a property over time, and is used to calculate the replacement cost of a property.