What does holding 80% of the property's value allow an insured to receive?

Holding 80% of the property's value in insurance coverage refers to the concept of "coinsurance," which is a fundamental principle in property insurance. When an insured maintains coverage that is at least 80% of the property's actual cash value, it typically allows the insured to benefit from a higher claims payout upon loss.

If a loss occurs, the insurer will look to the amount of coverage in relation to the property's value to determine the payout. By holding at least 80% coverage, the insured avoids the penalties of underinsurance and is more likely to receive full compensation for their losses based on their policy limits. Essentially, this ensures that the insured has adequate protection, which translates into higher claims payouts should a loss occur.

In short, maintaining 80% coverage provides assurance that, in case of significant damage or loss to the property, the insured will be compensated in a way that reflects a fair value based on the coverage they have in place.