What is an Insurance Limit?

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Insurance policies are essential to secure people financially in case anything happens to one’s property or on one’s health. Insurance plans will serve as lifesavers for the insured since they will not have to pay out of their pockets as long as they have the necessary coverage for what they endured.

No matter the type of policy one has and its coverages, people will not enjoy their insurance limitlessly since their policies have limits. Insurance limit is one concept that many people tend to misunderstand, resulting in several misconceptions, especially when they’re making insurance claims, only to find out that they’ll have to pay more out of their pockets.

Several people opt to get the cheapest insurance policy available, thinking that it’s sufficient to meet their sudden needs. The more affordable the insurance plan, the lesser the coverages there are, and the lower the insurance limit is. Insurance limits determine the amount of money an insurer will pay for a covered claim, which is why it is essential to have a high limit.

Are There Multiple Limits in an Insurance Policy?

An insurance policy has a collection of coverages that protect the insured when the unexpected occurs, and each coverage has its limit. Car insurance policies have different coverages, including personal accident, own damage and theft, and voluntary third-party liability coverage, and these have their own insurance limits.

How Coverage Limits are Determined

The insurance policy’s coverage limits are generally determined by what type of coverage the insured has, as well as what the inclusions are in the policy.

Car Insurance Coverage Limits

Comprehensive car insurance and collision coverage limits are determined by the vehicle’s actual cash value while taking depreciation into account. Both the insurance costs and the limits will depend on the car’s brand, model, and type, as well as its year of manufacture.

The compulsory third-party liability coverage limit is capped at ₱100,000, while the voluntary third-party liability coverage limit starts at ₱100,000.

Home Insurance Coverage Limits

Home insurance will also have separate limit amounts for the different coverages inside the policy. The insurance limit will largely depend on the type of property, the type of coverage, and the home’s value.

Selecting to insure the home only, the contents only, or both the home and the contents will affect the insurance limit the insured will be able to enjoy.

Health Insurance Coverage Limits

The insurance limits of health insurance policies depend on the benefits covered in the plan, as well as the monthly premiums one will have to pay for the insurance policy. The different brands also offer multiple options and varying monthly premiums that influence how much the maximum benefit the insured can have.

The inclusion of pre-existing condition, outpatient benefit, and accidental death also affect the policy’s insurance limit.

Plan on the Insurance Policy to Get

Getting insured is vital for people to keep themselves financially secure in case they suffer losses, including property damage and health issues. The insurance limits will be listed on the Declarations page of the policy. People cannot transfer the limits from one part of their policy to another when they find out that a particular limit is insufficient to cover their expenses.

Car owners who have low coverage limits for a personal accident cannot transfer the limit from voluntary third-party liability bodily injury to cover their expenses. People must make sure that they get the right insurance policy for their needs so that they will have the necessary coverages and adequate coverage limits.

It’s also essential to take into account the value of one’s assets and to work together with a reputable insurance agent in case a policy limit claim will be filed.

It’s essential to have the insurance policy with the right coverage and with an ample insurance limit to ensure that people will not have any problems when they file an insurance claim. People should look for the best insurance comparison site in the Philippines to ensure that they’ll get the most affordable insurance policy with sufficient insurance limits.

If you need either life or non-life insurance with a high insurance limit, then start comparing the different insurance policies available through our website at www.ichoose.ph or contact us at 875 6677.



Author: erwin reyes

Erwin has a combined experience of more than 15 years in the car insurance industry in the Philippines and Australia. Loves cars and enjoys to sourcing out great deals for its clients