AmountofAmountofinsurancecarriedinsurancerequired For example, assume that a commercial building has an actual cash value of $1,000,000 and that the owner has insured it for only $600,000. If an 80 percent coinsurance clause is present in the policy, the required amount of insurance based on actual cash value is $800,000(80%$1,000,000). If a replacement cost policy is used, the required amount of insurance would be based on replacement cost. Thus, if a $100,000 loss occurs, only $75,000 will be paid by the insurer. This calculation can be illustrated as follows: $800,000$600,000$100,000=$75,000