Can different coverage limits apply to a loss under an insurance policy?

Different coverage limits can indeed apply to a loss under an insurance policy, depending on the types of coverage included in that policy. Insurance policies may provide multiple coverages that address various kinds of risks with their own specified limits. For instance, in a commercial property insurance policy, one limit might apply to damage caused by fire while a different, lower limit might apply to theft or equipment breakdown. This flexibility allows for tailored risk management based on the insured's specific needs and the nature of the risks they face.

Moreover, different types of coverage, such as liability, property, and health insurance, each might come with distinct limits that reflect the specifics of the exposure being insured. This means that in the event of a claim, insurers can apply the appropriate limit that corresponds to the specific coverage under which the loss falls, thereby allowing for varied financial protection levels according to the nature of the claim. This variety is crucial for ensuring policyholders have adequate coverage tailored to their unique circumstances.