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.
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.
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.
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.
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.