What is the difference between coverage limit and deductible?

What is the difference between coverage limit and deductible?

The coverage limit is the maximum amount an insurer will pay for a claim, while the deductible is the amount you pay out of pocket before insurance kicks in.

Can you give me an example of how they work together?

Sure! If you have a coverage limit of $100,000 and a deductible of $1,000, you pay the first $1,000 of a claim, and the insurance covers the rest up to $100,000.

How do I choose the right coverage limit and deductible for my policy?

Consider your financial situation and risk tolerance. A higher deductible usually means lower premiums, but ensure you can afford the deductible if a claim arises.

What happens if my claim exceeds the coverage limit?

If your claim exceeds the coverage limit, you are responsible for paying the difference out of pocket.