Item limits

Items can have multiple limits, each with one of the following types:

  • Per risk
  • Per occurrence
  • Policy aggregate

Per Risk Limit

The Per Risk Limit is a limit for a specific risk such as:

  • A car.
  • A building.
  • A “per person” limit, grouping all people together.

Example:

Towing and Labor
    Per Risk Limit: $600
    Claim Amount: $750

Due to the $600 Per Risk Limit, $150 of the claim won’t be paid.

Example 2:

Rental Reimbursement
    Per Risk Limit: $100 per day maximum 30 days
    Claim Amount: 5 Days of rental at $300 a day, Total: $1,500

Due to the $100 per day Per Risk Limit, only $500 will be covered.

Per Occurrence Limit

The Per Occurrence Limit is the total amount the insurance company will pay per incident during the policy term.

Note: Per occurrence limits are subject to the aggregate limit.

Example:

Bodily Injury
    Per Occurrence Limit: $50,000
Claims:
    Person 1 Injured : $25,000
    Person 2 injured : $25,000
    Auto Damage      : $25,000

Due to the $50,000 Per Occurrence Limit, $25,000 of the claims won’t be covered under this policy.

Policy Aggregate Limit

The Policy Aggregate Limit is the maximum amount an insurer will pay for covered losses during a policy period.

Example:
Policy Aggregate limit: $200,000

Claims:
    Bodily Injury
        Per Occurrence Limit: $100,000
    Medical Payments
        Per Occurrence Limit: $10,000
    Personal Injury
        Per Occurrence Limit: $100,000
    Fire Legal
        Per Occurrence Limit: $50,000
                       Total: $260,000

Due to the $200,000 Policy Aggregate Limit, the most the insurer will pay is $200,000.