Coverage limits refer to the maximum amount an insurance policy will pay for a covered loss. For example, if you have a car insurance policy with a coverage limit of $50,000, the insurer will only pay up to that amount for damages or injuries resulting from an accident. Any costs beyond this limit would be your responsibility. These limits can vary based on the type of insurance, such as health insurance, homeowners insurance, or auto insurance. It's important to understand your coverage limits to ensure you have adequate protection and to avoid unexpected out-of-pocket expenses in case of a claim.