# 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.

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.

Coverage, definitions, limits, and legal requirements vary by policy and state. Your declarations page and policy forms control your coverage.

## Related terms

- [Coverage limit](https://locations.goautoinsurance.com/car-insurance-glossary/coverage-limit.md)
- [Split limits](https://locations.goautoinsurance.com/car-insurance-glossary/split-limits.md)
- [Combined single limit](https://locations.goautoinsurance.com/car-insurance-glossary/combined-single-limit.md)

- [Car insurance guide](https://locations.goautoinsurance.com/car-insurance-guide.md)
- [Complete glossary](https://locations.goautoinsurance.com/car-insurance-glossary.md)