What is the term for the maximum amount an insurer pays for a single claim?

The maximum amount an insurer pays for a single claim is referred to as the limit of liability. This term is critical in insurance policies as it defines the insurer's responsibility regarding how much they will cover in the event of a loss. Understanding this limit helps policyholders comprehend the maximum protection they can receive from their insurance provider for any particular incident.

On the other hand, the deductible is the amount the policyholder must pay out of pocket before the insurance company covers the remaining balance of a claim, which is different from the insurer’s maximum payout. The policyholder premium refers to the amount the insured pays to maintain the policy, not the limit on what the insurer pays on claims. Lastly, an aggregate limit pertains to the maximum amount an insurer will pay for all claims over a specific period, often a year, rather than a single claim. This helps clarify how the limit of liability is specifically focused on individual claims, making it the correct term.