Policy Limits

Policy limits are the maximum amounts your insurance company will pay for covered losses. Different coverages within your policy have their own limits.

Common Limit Types:

• Dwelling coverage: Maximum for your home's structure
• Other structures: Usually 10% of dwelling (detached garage, fence)
• Personal property: Your belongings (typically 50-70% of dwelling)
• Liability: Protection against lawsuits
• Medical payments: Minor injury claims by guests
• ALE: Living expenses while displaced

  Sub-Limits:

Within personal property coverage, certain categories have lower limits:

• Cash: $200-$500
• Jewelry: $1,500-$2,500
• Electronics: May be limited
• Firearms: Often $2,500
• Business equipment: Limited or excluded

  Choosing Limits:

1. Calculate actual replacement cost of your home 2. Inventory your belongings to determine personal property needs 3. Consider your assets when choosing liability limits 4. Review annually and after major purchases

Underinsurance: Being underinsured means your coverage limits are too low to fully replace your losses. This is why accurate home inventory and regular policy reviews are essential.