Simply put, an insurance policy limit is the maximum amount an insurance company will pay on behalf of the client. Any costs exceeding that limit will be the responsibility of the policy holder. It’s perhaps one of the most important aspects that individuals should understand about their car or home insurance policies.
Car accidents can be one of the costliest for drivers and the mandatory limits set by the state probably won’t be adequate in the event of a catastrophic accident that can leave people disabled or dead. Property damage can be extensive and medical services can quickly rack up more in charges than the coverage limits of the policy, in which case the policy holder is responsible for any costs over that.
Individuals can suffer injuries that require extensive rehabilitation and care. Policy holders can also face expensive lawsuits from the other driver for medical costs and lost income. Individuals usually view coverage of $100,000 per person as adequate, but they can also select up to $300,000 in coverage that provides protection for the policy holder under a variety of circumstances.
There are some insurance carriers that will automatically include extended replacement costs in a policy, while individuals will have to ask their insurer about the coverage. This is primarily an option for individuals with homes that have to be rebuilt and the cost is more than originally estimated, along with homes that have unique features or items such as swimming pools. The extended coverage is typically 125 percent over the value and usually applies to newer homes.
Liability insurance for the home typically provides limits of $100,000 to $300,000 depending upon the insurance company. An umbrella policy is available and designed to cover claims in excess of the limits of the homeowner’s policy in the event that an individual is sued for an injury sustained on the property.
For more information about how The Sena Group can help you with any
of your insurance needs, please contact us at 561-391-4661.
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The Sena Group
6501 Congress Ave., Ste. 100
Boca Raton, FL 33487