What is Policy Limit?
Quick answer
The policy limit is the maximum amount an insurer will pay for a covered loss, either per occurrence or in aggregate over the policy period.
The policy limit is the maximum amount an insurer will pay for a covered loss, either per occurrence or in aggregate over the policy period. Claims above the limit are your responsibility.
Examples
- $300,000 liability limit caps what the insurer pays for a single lawsuit.
- A $5,000 jewelry sub-limit caps theft payouts for jewelry regardless of the total contents limit.
- Umbrella policies sit on top of underlying limits to extend coverage.
Why this matters
ReadMyPolicy compares your limits against realistic loss scenarios so you can see where you're one claim away from paying out of pocket.
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Frequently asked questions
What is Policy Limit?
The policy limit is the maximum amount an insurer will pay for a covered loss, either per occurrence or in aggregate over the policy period. Claims above the limit are your responsibility.
When does Policy Limit matter?
ReadMyPolicy compares your limits against realistic loss scenarios so you can see where you're one claim away from paying out of pocket.
What's an example of Policy Limit?
$300,000 liability limit caps what the insurer pays for a single lawsuit. A $5,000 jewelry sub-limit caps theft payouts for jewelry regardless of the total contents limit. Umbrella policies sit on top of underlying limits to extend coverage.
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