What is the term for the maximum amount an insurer will pay for a covered loss?

The term for the maximum amount an insurer will pay for a covered loss is a policy limit.

A policy limit is the ceiling written into an insurance contract for a particular coverage. For example, a liability policy might promise up to $100,000 for bodily injury to one person, while a property policy might cap rebuilding or personal-property payments at a stated amount. Some policies also have aggregate limits, which cap total payments during a policy period.

A policy limit is not the same as a deductible. The deductible is the amount the policyholder pays before the insurer contributes. A premium is the price paid for the policy, while a co-pay is a cost-sharing amount more commonly associated with health coverage. Those amounts affect what the customer pays, but they do not define the insurer’s maximum obligation.

Limits can sometimes be increased by paying a higher premium. Umbrella insurance may provide additional liability protection above the limits of underlying home or auto policies, although it has its own terms, exclusions, and limit.