What is the function of coinsurance in property insurance, and how does it affect settlement?

What is the function of coinsurance in property insurance, and how does it affect settlement?

• A. It increases premiums but has no effect on settlement.
• B. It requires the insured to carry a minimum percentage of value; if not met, loss payment is reduced proportionally.
• C. It waives the deductible for large losses.
• D. It only applies to liability coverage, not property.

Answer: (B)