Policy limits measure the loss incurred on an exposure or claim and define the maximum amount the insurer will pay.
BriteClaims recognizes and is configured to apply the following policy limits:
- Per occurrence limit
- Per person limit
- Split limits
- Combo single/split limits
Per occurrence limit
The per occurrence limit comes from the policy and is associated with a specific coverage. The Per Occurrence Limit is the maximum amount the insurer will pay for all claims resulting from one occurrence.
An example of the Per Occurrence Limit is $100,000/Occurrence for Property Damage Liability. If an incident occurs that results in more than one property damage claim, the insurer will pay up to $100,000, regardless of how much property is damaged.
If a reserve is set above the $100,000 limit, the reserve will be rejected. If a payment is made the increases the total number of payments above $100,000, the payment will be rejected.
Per person limit
The per person limit comes from the policy and is the maximum amount the insurer will pay for one person’s injuries.
An example of a per person limit is $5,000/person for medical expenses. If an incident occurs that results in the injury of two parties, where one party has $3,000 in medical expenses and the other party has $7,000 in medical expenses, the former party will receive $3,000 and the latter will receive $5,000.
If a reserve is set above the $5,000 limit, the reserve will be rejected. If a payment is made that increases the payment for one party’s medical expense above $5,000, the payment will be rejected.
Split limits combine the per person limit and the per occurrence limit. With split limits, separate dollar amounts are set for each limit. The established limits determine how much of the loss the insurance will pay for.
An example of a split limit is $300,000/occurrence for bodily injury and $100,000/Person for the bodily injury. With this example, the $300,000/occurrence limit for bodily injury is the maximum amount the insurer will pay to all injured involved parties. The $100,000/person limit for bodily injury is the maximum amount the insurer will pay to any injured involved party.
Combined single/split limits
The combined single limit is a single dollar limit that is applied to a combination of bodily injury and property damage claims. With combined single limits, one dollar amount is set for a combination of coverages. The established limit determines how much of the loss the insurance will pay for.
Combined single/split limits are commonly used for un/underinsured motorist coverage. An example of combined single/split limits is $100,000/occurrence for property damage, $300,000/occurrence for bodily injury, and $100,000/person for bodily injury.