Standard Limit

What Does Standard Limit Mean?

A standard limit is the maximum amount of coverage that a policyholder can be reimbursed for during a policy period under a standard policy. The policyholder is responsible for any amount exceeding the coverage provided by the standard limit.

Insuranceopedia Explains Standard Limit

Insurers set standard limits to define the exact amount of risk they are liable for, which is crucial for calculating profitability. Insurance purchasers can often obtain coverage beyond the standard limit, but this usually requires purchasing a non-standard policy. Policies with higher coverage typically come with higher premiums, meaning increased limits come at an additional cost.