The paper focuses on rational insurance purchasing decisions in an industrial setting which are characterized by the possibility of many losses during the period of insurance protection. Rational insurance coverage can be achieved through coinsurance in terms of deductible arrangements and insurance limits. Analyzing various degrees of coinsurance requires the distribution of the cost retained as a result of deductibles and insurance limits. A method for deriving this distribution is developed. The approach is applied to a sample problem using different decision criteria.