Policy Limit (Insurance & Financial Protection) - Definition, Examples, Advice | Bolder Money

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Definition

The maximum amount an insurer will pay for a covered loss. It sets the cap on your coverage so you know the limits of protection.

What to consider

Review limits to ensure they cover potential losses.
Understand how exposure limits affect claims.
Plan supplemental coverage if needed.

Real world scenarios

An insurer sets an exposure limit on claims to cap losses per event.
A property policy includes an exposure limit for natural disaster claims.
An auto insurer specifies an exposure limit for high-cost accidents.

Related terms

Insurance & Financial Protection

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