The maximum amount of money the insurance company will pay for a particular loss is known as what?

The maximum amount of money that an insurance company will pay for a particular loss is referred to as "limits of liability." This term defines the maximum funding the insurer will provide under the terms of the policy, distinguishing the coverage endpoints for claims. Understanding limits of liability is essential for policyholders, as it informs them of the maximum protection they have in the event of a loss.

In property insurance, the specified limits typically depend on policy specifics and can vary based on different types of coverage—such as dwelling, personal property, and liability protection. Effectively, it ensures that both the insurer and the insured have clear expectations of the financial coverage involved in the policy.

The other options refer to different concepts unrelated to the maximum payout for losses. Estoppel refers to a legal principle that prevents a party from arguing something contrary to a previously established position. Indemnity refers to the concept of restoring the insured to their financial state prior to the loss without resulting in a profit from the claim. Liberalization refers to a provision in insurance policies where any broadened coverage provided by the insurer applies automatically to active policies without increased premium. These concepts, while significant in the broader context of insurance, do not specifically define the cap on payout for a loss.