You insure your $200,000 home under a HO-3 policy with an 80% coinsurance provision, deciding to purchase $150,000 in coverage. You sustain a $10,000 covered loss. Your claim settlement after ignoring any deductible will be $9,375.
We can calculate the claim settlement amount using the formula (co-insurance);
Loss payment (taking deductible = 0 as ignoring);
= (insurance coverage / insurance limit) x Loss
= ($150,000/$160,000) x $10,000