In each of these situations, the insurer does not reimburse the entire loss. Rather, the policyholder must cover part of the loss himself. This is often referred to as coinsurance. The next two sections discuss specific types of limits on policy benefits.
LIMITS ON POLICY BENEFITS
In all types of insurance there may be limits on benefits or claim payments. More specifically,
there may be a maximum limit on the total reimbursed; there may be a minimum limit on losses
that will be reimbursed; only a certain percentage of each loss may be reimbursed; or there may be
different limits applied to particular types of losses.
In each of these situations, the insurer does not reimburse the entire loss. Rather, the policyholder must cover part of the loss himself. This is often referred to as coinsurance. The next two sections discuss specific types of limits on policy benefits.
In each of these situations, the insurer does not reimburse the entire loss. Rather, the policyholder must cover part of the loss himself. This is often referred to as coinsurance. The next two sections discuss specific types of limits on policy benefits.
