To avoid penalties, what should Betty's actual coverage be to meet the coinsurance requirements?

To determine the appropriate coverage to meet the coinsurance requirements, it's essential to understand how the coinsurance clause operates. Coinsurance typically requires that a property be insured for a certain percentage of its total value (commonly 80% or more) to avoid penalties in the event of a loss.

If Betty's property has a total value of $100,000, to meet the typical coinsurance requirement of 80%, she would need to maintain coverage of at least $80,000. This amount represents 80% of her property's value, thereby ensuring compliance with the coinsurance clause. If she carries less coverage and a claim occurs, she may face penalties that could significantly reduce her payout.

Hence, having $80,000 in coverage effectively meets the coinsurance requirement and helps Betty avoid penalties. This understanding is key to managing insurance risks and ensuring adequate protection against potential losses.