Definition

The total amount the insurer will pay over the life of the policy. It ensures that there is a maximum payout in case of multiple claims.

What to consider

  • Know the maximum payout for a single event.
  • Consider supplemental coverage if limits are low.
  • Review past claims to assess adequacy of the limit.

Real world scenarios

  • An insurance policy imposes a per occurrence limit on claims, such as a cap per accident or incident.
  • A homeowner’s policy includes a per occurrence limit for damage claims.
  • An auto policy sets a per occurrence limit for liability claims in a single accident.

Related terms

Insurance & Financial Protection