What is a liability limit?

A liability limit is a predetermined amount of money that an insurance company will pay out in the event of a claim against an insured party. In Arizona, liability limits are determined by the type of policy that was purchased. Liability limits are important as they protect the insurance company from having to pay out large sums of money in the event of a claim. The amount of the liability limit depends on the type of insurance purchased, and the state laws governing liability limits. For example, in Arizona, liability limits on a vehicle may range from $10,000 to $50,000. This amount of money would usually cover the cost of damage to the other person’s property and any medical bills that could arise if someone is injured in an accident. In Arizona, liability limits are also determined by the type of claim that is being made. Personal injury claims or property damage claims usually carry a lower liability limit than auto insurance claims. For example, a homeowner’s liability policy may have a limit of $50,000 while an auto policy may have a limit of $100,000. No matter what type of policy is purchased or the state laws that govern liability limits, it is important to understand the liability limits associated with the policy. Knowing the limits helps to ensure that the insurance company will be able to provide the coverage needed in the event of a claim.

Related FAQs

What are the common causes of action in an insurance claim?
What is a liability limit?
What are the time limits for filing an insurance claim?
What is a power of attorney?
What is an uninsured motorist coverage?
What is the statute of limitations for filing an insurance claim?
What is the process for submitting an insurance claim?
What is a contractual liability exclusion?
What is the difference between an insurance policy and a contract?
What is a settlement offer in an insurance claim?

What is a liability limit?

Related FAQs

Related Blog Posts