Car insurance glossary
What is policy limit?
A policy limit is the most an insurer will pay for a covered loss under the stated part of a policy.
Also called: insurance limit
Glossary date: February 2, 2026
How it works
Limits may apply per person, per accident, per item, or for the full policy period. Different coverages on one policy can have different limits.
Example
A property damage liability limit is $25,000, but a covered accident causes $31,000 in damage. The $6,000 difference may remain your responsibility.
Why it matters
Coverage can apply to a claim and still leave unpaid costs once the limit is reached.
What to check on your policy
Match each limit to its coverage and learn whether it applies per person, per accident, or per policy period.
Related car insurance terms
Put the terms into context
Read the full guide, find a nearby GoAuto office, or start a quote with the coverage details you want to discuss.