limits, standard

  • This term applies to bodily injury and property damage lines. For example, a policy written with standard bodily injury limits could restrict the liability of the carrier to an amount not exceeding $5,000 (called the "lower limit" ) for injuries to one person, and subject to such limit per person, to an amount not exceeding $10,000 (called the "upper limit" ) for any one accident involving two or more persons. A policy written with standard property damage limits could restrict the liability of the carrier to an amount of $5,000 (in the case of automobile insurance) for each accident resulting in damage to property. The rates in the rating manuals usually are based on standard limits, and these manuals contain tables for use in determining rates and premiums for increased limits. The limits may vary by company. Also called "Basic Limits of Liabilities."

    Internal Revenue Service 1
    See also limits, excess

1Internal Revenue Service, Internal Revenue Manual 4.42.6 Glossary, http://­www.irs.gov/­irm/­part4/­irm_04-042-006.html (last accessed Dec. 22, 2009).