Question

What type of limit does an insured have if her coverage maximum is restored at the policy anniversary, regardless of claims made during the year?

A) Aggregate limit
B) Occurrence limit
C) Per-accident limit
D) Annual limit

Answer 1

The type of limit she has is the Annual limit, which means her coverage maximum is restored at the policy anniversary, regardless of claims made during the year.

Step-by-step explanation:

The type of limit that an insured has when their coverage maximum is restored at the policy anniversary, regardless of claims made during the year, is Annual limit.

This means that the insured has a maximum coverage amount for each policy year, and if they reach this limit, it will be restored at the policy anniversary.

For example, if an insured has an annual limit of $50,000 and they make claims totaling $40,000 during the year, their coverage will be restored back to $50,000 at the policy anniversary.