If an insured carries insurance less than the required 80% according to the coinsurance clause, losses will be paid how?

When an insured does not maintain at least 80% of the property’s value as specified by the coinsurance clause, the policy will typically pay losses based on actual cash value. The actual cash value method takes into account depreciation and reflects what the property is currently worth rather than what it would cost to replace it. This method is utilized because the purpose of the coinsurance clause is to encourage insureds to insure their property adequately. If they fail to meet this requirement, they may not receive full compensation after a loss, reinforcing the principle of coinsurance which aims to ensure that property is insured to at least a certain percentage of its value. Thus, the focus is on ensuring fairness and responsibility in property insurance.