Occasionally referenced as "Coverage Limits" or "Limits of Insurance" - The maximum amount an insurance carrier is obligated to pay for a covered loss under the insurance policy. This amount, outlined in the policy contract, can be per occurrence or total over the policy term. It is vital for policyholders to understand their coverage limits to ensure sufficient protection against potential risks. Too low limits might leave them financially exposed, while excessively high limits can lead to unnecessary premium costs.
