Am I Covered? Understanding Policy Limits

Ever stare at your insurance declarations page and wonder, “Am I really covered?” This post breaks down policy limits so you know exactly where you stand before disaster strikes.

What Are Policy Limits?

Policy limits define the maximum amount your insurer will pay for covered losses. They vary by coverage type:

• Per-Occurrence Limits – Maximum payout per incident (e.g., $300K per auto accident).
• Aggregate Limits – Total payout cap over the policy period.
• Sub-Limits – Specific caps for categories like jewelry or water backup.

Why Limits Matter

Exceeding your limit means you pay out of pocket. Match limits to your risk profile:

• High-value homes: $500K+ dwelling coverage
• Urban drivers: $100/300 BI, $100 PD
• Landlords: Umbrella policy for liability

Adjusting Your Limits

Review limits annually or after major life changes:

• Home renovations
• New vehicles
• Additional family members

Tools & Tips

• Use an online coverage calculator .
• Ask for a declarations page walkthrough.

Still Have Questions?