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Coinsurance does not apply to a total loss.

April 1, 2012
Magie v. Preferred Mutual Ins. Co., 937 N.Y.S.2d 452 (App. Div. 3d Dept., January 26, 2012)

The insureds' home was destroyed by fire in August 2005. Their loss exceeded their policy coverage limits, and the insureds opted not to rebuild. In New York, a coinsurance clause reduces the recovery in case of a partial loss; however, in case of a total loss, the insurer is liable for the amount named in the policy. Additionally, the applicability of a coinsurance claim is an affirmative defense that must be pleaded. As such, where it is undisputed that the insureds have suffered a total loss, a coinsurance clause does not apply.

Case Law Alert - 2nd Qtr 2012

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