Co-insurance is a type of cost-sharing arrangement in which the insured person is responsible for paying a certain percentage of their medical expenses, while the insurance company pays the remaining percentage. For example, if a person has a 80/20 co-insurance policy, the insurance company would pay 80% of the covered medical expenses, and the individual would be responsible for paying the remaining 20%.

Co-insurance is commonly found in health insurance policies, and it’s usually applied after the policyholder has met their annual deductible. It’s different from a co-pay, which is a fixed dollar amount that the policyholder pays out of pocket for each medical service, regardless of the cost.

Co-insurance can also apply to other types of insurance, such as property insurance, where the policy holder and the insurance company share the costs of a loss. This can mean that the policy holder is responsible for paying a percentage of the loss and the insurance company pays the rest.

In some cases, co-insurance can help to keep the cost of insurance down, but it also means that the policyholder will have to pay a portion of the costs, so it’s important to understand the co-insurance terms before purchasing a policy.