What does coinsurance typically represent in an insurance policy?

Coinsurance is a cost-sharing arrangement in an insurance policy where the insured party and the insurer share the costs of covered expenses after the insured has met their deductible. Typically, coinsurance is expressed as a percentage, defining what portion of the costs the insured must pay compared to what the insurer pays.

In the context of the correct answer, after the deductible amount has been satisfied, the policyholder is responsible for a certain percentage of the remaining expenses. If the coinsurance requirement is set at 20%, this means that after the insured has paid the deductible, they will pay 20% of the subsequent medical bills, while the insurance company will cover the remaining 80%. This directly aligns with the definition of coinsurance and highlights how it works as a shared cost mechanism between the insured and the insurer.

The other choices do not accurately describe coinsurance; they either represent different aspects of insurance or payment structures that do not align with its definition. For instance, one option suggests covering 100% of the bill after the deductible, which ignores the cost-sharing aspect of coinsurance. Another option describes a flat fee per treatment, which does not involve percentage-based cost sharing. Lastly, the option stating that no payment is required after the deductible contradicts the core