What are the different types of coverage limits in insurance?

What are the different types of coverage limits in insurance?

Coverage limits in insurance refer to the maximum amount an insurer will pay for a covered loss. There are several types, including:

1. Per Occurrence Limit: The maximum amount paid for a single claim.
2. Aggregate Limit: The total amount paid for all claims during a policy period.
3. Sub-limits: Specific limits for certain types of coverage within a policy, like theft or water damage.
4. Deductibles: The amount you pay out of pocket before insurance kicks in.

Can you explain the difference between per occurrence and aggregate limits?

Sure! The per occurrence limit is the maximum amount your insurance will pay for a single claim, while the aggregate limit is the total amount your insurance will pay for all claims during a policy period. For example, if you have a per occurrence limit of $100,000 and an aggregate limit of $300,000, you could file three separate claims for $100,000 each within the policy period.

What happens if I exceed my coverage limits?

If you exceed your coverage limits, you will be responsible for paying the excess amount out of pocket. This is why it's important to assess your coverage needs and ensure your limits are adequate for potential risks.

How can I increase my coverage limits?

You can increase your coverage limits by contacting your insurance provider and discussing your options. They may offer higher limits for an additional premium, or you might need to adjust your policy to include more coverage.