What is a limitation of coverage?

A limitation of coverage is a provision in an insurance policy that limits the amount of money that an insurer will pay in the event of a claim. In Hawaii, insurance claims law states that all insurance policies must clearly state any limitations of coverage. This ensures that insurance policy holders are aware of the limits that an insurance company may impose on the payment of a claim. Examples of limitations of coverage include maximum payouts, deductibles, and coverage exclusions. Maximum payouts refer to the maximum amount of money that an insurer will pay out for a claim. If the costs of the claim exceed this maximum amount, the insured will be responsible for any additional costs. Deductibles refer to the amount of money that the insured must pay out-of-pocket before the insurance company pays any money towards the claim. Coverage exclusions refer to any activities or incidents that are specifically excluded from coverage under the policy. It is important for all policyholders to understand the limitations of coverage listed in their insurance policy. Knowing the limitations of coverage will help policyholders make decisions about their insurance needs and understand what types of losses are covered by their policy.

Related FAQs

What is a co-insurance clause?
What is an insurer's duty of good faith?
What is a coinsurance clause?
What is an insurance deductible waiver?
What are the consequences of making a false statement on an insurance claim?
What is an extracontractual claim?
What is an act of God exclusion?
What is the statute of limitations for filing a liability claim?
What is a supplemental insurance policy?
What is the statute of limitations for filing an insurance claim?

What is a limitation of coverage?

Related FAQs

Related Blog Posts