Rhode Island Insurance Adjuster Exam 2026 – Complete Study Guide

Question: 1 / 400

What is a "policy limit"?

The maximum amount the insured can claim annually

The maximum amount an insurer will pay for a covered loss

A "policy limit" refers to the maximum amount an insurer is obligated to pay for a covered loss under an insurance policy. This limit is specified within the terms of the policy and serves to define the insurer's financial liability in relation to claims made by the insured. For example, if a homeowner has a policy limit of $200,000 for property damage, this is the maximum amount the insurer would cover in the event of a claim for damage to the home.

Understanding policy limits is crucial for both the insured and the insurer, as it outlines the boundaries of coverage and financial protection available under the policy. This concept helps in preventing disputes over claim amounts and clarifies expectations regarding the insurer’s payouts in the case of a loss.

Get further explanation with Examzify DeepDiveBeta

The minimum coverage requirement under state law

The total amount of coverage an insured can purchase

Next Question

Report this question

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy