Maximum Coverage
What Does Maximum Coverage Mean?
Maximum coverage refers to the highest amount of coverage an insurance company will provide during a specific period. If a policyholder requires coverage beyond this amount, they would need to pay out-of-pocket or seek alternative insurance. The details of maximum coverage are outlined in insurance policies, ensuring that policyholders fully understand the extent of their coverage.
Maximum coverage is also known as a maximum limit or policy maximum.
Insuranceopedia Explains Maximum Coverage
Maximum coverage is used in many different types of insurance. Often, if an insurance buyer wants a higher maximum coverage, they would need to purchase a policy with higher premiums.
The reason many insurance policies have maximum coverage limits is to protect the insurer from underwriting losses, which can occur if claims exceed certain amounts. Such losses could jeopardize the future of the business. Depending on the premiums and the specific policy, there may be a cap on the amount an insurance company is willing to pay out.
If an individual needs more coverage than the maximum limit, they can purchase an additional policy or seek a policy with a higher maximum coverage.
