1. The Co-Insurance Clause1. The Co-Insurance Clausehttp://chad.ca/en/members/professional-practice/toolbox/regle-proportionnelle/398/1-the-co-insurance-clause

​It is not always easy for a representative to explain the co-insurance clause to clients. However, it is crucial to do so, since this clause may result in a limit to the amount of compensation paid in the event of a partial loss.

It is therefore important that the client clearly understand the consequences of this clause, since the insured is required to insure his property at replacement value or, as the case may be, for a minimum amount that corresponds to the percentage stipulated in the contract (generally 80% or 90%).


  • Even if the amount of damages is lower than the amount of insurance stipulated in the contract, the insured might have to absorb a portion of the cost of damages himself.
  • The amount of damages that the insured will have to absorb will depend on the difference between the amount of insurance stipulated in the contract and the minimum amount of insurance required to comply with the co-insurance clause.

N.B.: Quebec personal-lines home insurance forms available from the Insurance Bureau of Canada no longer include a co-insurance clause. In the absence of such a clause, insurers may apply section 2493 of the Civil Code of Quebec, which requires a co-insurance clause of 100%.

For more detailed information, please read the documents provided below.


  • Client fact sheet (February 2015)
    This sheet includes:

    • The consequences of non-compliance with the co-insurance clause.
    • An explanatory table

  • ​Total or partial loss: determining criteria (April 2010 – French only)
    Establishing whether a loss is total or partial is crucial in cases of under-insurance and when applying the co-insurance clause. In a 2009 decision, the Appeal Court of Quebec disallowed the rigid application of the mathematical formula used by the insurer, instead suggesting an approach based on a set of contextual criteria.

12/10/2015 2:57:44 PM