What is Coverage Limit?
Coverage Limit The maximum amount an insurer will pay for a covered loss under an insurance policy, as specified in the contract terms and conditions.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Coverage Limit” Used in Practice?
If the damages exceed the coverage limit, the insured is responsible for any amount above the policy’s maximum payout.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Coverage Limit?
The maximum amount an insurer will pay for a covered loss under an insurance policy, as specified in the contract terms and conditions.
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