Your coverage limits identify the maximum amount of money your car insurance policy will pay after a covered loss. Once that limit is reached, you are responsible for paying any additional out-of-pocket costs. Insurance policy limits will vary depending on the type of insurance coverage and your state's requirements, but all insurance policies will have some type of limit. The limits of the insurance policy tell you the maximum amount your insurance will pay for claims for each type of coverage you have.
We help you navigate the world of insurance by providing you with expert advice and all the up-to-date information you need to make the best insurance decisions for you, your family and your business. A policy limit refers to the monetary amount that an insurance company will pay in connection with a specific insurance policy claim. However, if you think a claim is likely to come forward (for example, when you add a new teen driver to your car insurance policy), you might want to lower your deductible, at least temporarily.