What is a specific limit in property insurance?

In property insurance, a specific limit refers to a coverage structure where only a single item of property is insured for a designated amount. This means that each piece of property covered under this type of insurance has its own individual policy limit. For example, if you have a specific limit on a piece of artwork valued at $10,000, that is the maximum amount the insurer will pay for a covered loss related to that artwork.

This approach allows for tailored coverage for valuable items—ensuring that high-value assets are adequately protected without being grouped together under a single limit that may not reflect their individual worth. It provides clarity for both the insured and the insurer regarding the coverage provided for specific items of value.

On the other hand, coverage that includes multiple properties under one limit or covers only business property does not have the precise focus that specific limits do. Similarly, limiting insurance to only high-value items does not understand the broader application of specific limits, as they can apply to a wide range of property types beyond just high-value items.