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Co-insurance is a provision often found in property insurance policies that requires the policyholder to share a portion of covered losses, typically expressed as a percentage. This means that if the insured property is underinsured at the time of a loss, the policyholder will only receive a portion of the claim amount based on the percentage of insurance carried compared to the required or actual value of the property.

For example, if a policy has an 80% co-insurance clause, the policyholder must insure the property for at least 80% of its total value. If they fail to do so, and a loss occurs, the payout will be reduced in proportion to the amount they were underinsured. This principle encourages policyholders to maintain adequate coverage and can help insurers manage risk when underwriting policies.

Understanding co-insurance is crucial for policyholders, as it affects how much they can expect to receive in the event of a claim. The other options relate to different concepts: full coverage does not consider sharing losses, premium calculations are not tied to co-insurance, and additional coverage pertains to specific items rather than the shared loss concept of co-insurance.