CANADIAN INSURANCE TERM
Policy Limit
The maximum amount an insurer will pay for a covered loss, coverage or policy period, subject to the specific wording of the policy.
Plain-language definition. A real policy, endorsement and provincial law can use more specific wording than a glossary summary.
TermPolicy Limit
ContextCanadian insurance
Source typeIndustry glossary
Policy wordingControls claim
What does Policy Limit mean?
The maximum amount an insurer will pay for a covered loss, coverage or policy period, subject to the specific wording of the policy.
A policy can contain several different limits. The overall liability limit, contents limit and special sublimits can apply to different parts of the same policy.
Policy Limit in practice
A tenant policy may show one liability limit and a separate contents limit, with additional sublimits for certain categories of property.