Policy Limit

A Policy Limit can apply to a number of different insurance policies, such as automobile, property, health, life, and liability insurance. This limit is usually the maximum amount of coverage available for each covered incident or claim, meaning the insurance company will not pay more than the Policy Limit.

Examples

• Car accident: If damages exceed the Policy Limit, the insured person may be responsible for paying the difference out of pocket.
• Health insurance: An overall Policy Limit of $100,000 for the year may include a limit of $10,000 for any one incident, so the insurer will not pay more than $10,000 for a single claim.

Summary

In summary, a Policy Limit is the maximum amount of coverage provided under an insurance policy, as determined by the insurance company, and is applicable to a variety of different types of policies. It is important for policyholders to review their Policy Limit prior to purchasing insurance coverage to ensure they are adequately protected.