Limit (Policy Limit)
/LIM-it/
The maximum amount an insurer will pay for a covered loss.
Definition
A policy limit is the maximum amount your insurance company will pay for a covered claim. Limits can apply per incident, per person, or per policy period. Once you reach your limit, you're responsible for any additional costs. Higher limits provide more protection but cost more in premiums.
Example
With $100,000 bodily injury liability limits, the insurer pays up to that amount if you injure someone.
More General Terms Terms
The amount you pay for your insurance policy.
The amount you pay out-of-pocket before insurance kicks in.
The contract between you and your insurance company.
A request for payment under your insurance policy.
The protection provided by your insurance policy.
Something your insurance policy specifically does not cover.
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