Coverage Limit
The maximum amount your insurance company will pay for a covered loss according to your policy terms.
Detailed Explanation
Different types of coverage within your homeowners policy have different limits. It's important to set appropriate limits that would fully cover rebuilding your home or replacing your possessions after a major loss.
Practical Example
Jason's home was insured with a dwelling coverage limit of $300,000, but after a total loss fire, he discovered rebuilding costs had risen to $350,000, leaving him to pay the $50,000 difference out of pocket.
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