Coverage Limit
The maximum amount an insurance company will pay for a covered claim. Limits can apply per incident, per person, or for the entire policy period. Choosing the right coverage limit is a balance between adequate protection and affordable premiums.
Real-World Example
Rachel has a $300,000 coverage limit on her home dwelling coverage. If her house is destroyed, the insurer will pay up to $300,000 for rebuilding.
Related Terms
Disclaimer: This glossary entry is for informational purposes only and does not constitute financial or insurance advice. Consult with a licensed insurance professional for personalized guidance. GuardianChoices may earn affiliate commissions from links on this site — see our advertiser disclosure.
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