What is the 80% rule in home insurance?

What is 80% rule in home insurance in Australia and US, it means you must insure building for at least 80% of its replacement cost $500K to avoid co-insurance penalty, where if you insure for less than 80% of rebuild cost you pay proportion of claim, with 80% rule encouraging adequate sum insured. For example, building replacement cost $500K, 80% = $400K, you must insure for at least $400K to avoid penalty, if you insure for $300K which is 60% of $500K, you are underinsured by 20% below 80%, and if you have $100K fire claim, insurer may pay only 75% of claim $75K minus excess $500, so you pay $25K out of pocket plus excess. In Australia, 80% rule less common than US, but insurers apply average or co-insurance clause, where sum insured must be accurate rebuild cost $500K, not market value $800K including land $400K, with underinsurance penalty if sum insured less than 80% to 90% of rebuild cost. For instance, building rebuild $500K, you insure $350K 70% of rebuild, you have $100K storm damage, insurer may apply average clause paying $70K (350/500) = $70K, you pay $30K. So 80% rule means insure for at least 80% of replacement cost $400K for $500K rebuild to avoid penalty, with insurers encouraging sum insured calculators $500K building, $80K contents, costing $1,200 to $1,800 per year, with underinsurance risk $30K out of pocket if underinsured.