Financial

Policy limit

Policy limit

The maximum dollar amount of coverage provided by an insurance company for a certain policy.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Policy Limit

The maximum benefit an insurance company will pay a policyholder if/when an insured event occurs. For example, a health insurance policy may have a policy limit of $2 million. This means that the most the insurance company will pay in the case of catastrophic illness is $2 million. Many policy limits are rather high and most policyholders do not need to worry about medical bills of, say, $2 million. However, some long-term illnesses may result in medical bills that approach the limit. See also: Pre-existing condition.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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References in periodicals archive
According to Brown and lead plaintiff's counsel Kirk Presley, Elliott's employer, Oklahoma-based Flint Rock Products, initially only disclosed a $1 million auto liability policy with Travelers Insurance but failed to reveal a commercial insurance policy with Hanover, also with a $1 million policy limit.
The best policy limit is neither too big nor too small, A limit that is too high can create a larger target for unwarranted litigation and provide less incentive for plaintiff's attorneys to settle a claim efficiently, An overly high limit might also motivate plaintiffs to exaggerate their damages and make it harder to negotiate a reasonable settlement.
This can knock hundreds of pounds off the cost of medication and could mean the difference between pet insurance covering the full cost of a lengthy course of treatment or the owner having to cough up cash themselves once a policy limit has been reached.
The policy limit determines the amount that a company can draw upon in the event of a claim.
(3) So, in the example above, the primary insurer would pay the first $500,000 of the loss by virtue of its settlement payment, the policyholder would be responsible for the $500,000 gap caused by its settlement with the primary insurer for less than the full policy limit, and the excess insurer, subject to its own policy limit, would be responsible for the portion of the loss over $1 million if the claim is covered.
Weighted average maturity of the fund's assets has varied over the last year while remaining within maximum policy limit.
The testimony leaves out many material facts, such as policy limit, coverages that were available, extent and nature of injury, and whether that figure includes property damage and PIP, to name a few.
Settlement Demands Within the Policy Limit: The Duty To Settle 2.
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