A retained limit is essentially a deductible for larger, more complex insurance policies. It’s the amount of money that the insured party is responsible for paying out-of-pocket before the insurance policy kicks in.
This is particularly common in commercial insurance, umbrella policies, and other high-value coverage. For instance, a business might have a $1 million umbrella policy with a $10,000 retained limit. This means that if a claim exceeds $10,000, the insurance policy will cover the remaining amount up to the $1 million limit.
Retained limits can help manage insurance costs by reducing the amount of premium paid. However, it’s crucial to understand the implications of a high retained limit, as it could lead to significant out-of-pocket expenses in the event of a large claim.
At PSIC, we understand that unexpected events can sometimes lead to significant financial burdens. That’s why we offer Umbrella Insurance policies to provide additional protection beyond your standard policies.
Your Umbrella policy includes a retained limit. This amount is specified in your policy document and declaration page. In the event of a covered claim, you’ll be responsible for paying the retained limit first, and then your Umbrella policy will cover the remaining costs, up to your policy’s limit.
While a retained limit can help manage costs, it’s important to choose a level that you’re comfortable with. Consider your financial situation and the potential risks you face when selecting a retained limit.
If you have any questions about retained limits or your Umbrella policy, please contact your insurance agent. They can provide personalized guidance and help you make informed decisions to protect yourself and your assets.
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Last updated: June 27, 2023
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