Which terms are synonymous with limits of liability?

The term "limits of liability" in insurance typically refers to the maximum amount that an insurance policy will pay for a covered loss. This concept is crucial for understanding how much financial protection a policy provides.

The phrase "face amount" refers to the specified amount of money stated in an insurance policy, which represents the limit the insurance company will pay in the event of a claim. "Amount carried" often relates to the amount of coverage that a policyholder maintains for a specific risk. Both terms are commonly associated with insurance policies and directly relate to the limits of liability, as they describe the scope of coverage and financial responsibility in the event of a claim.

In this context, the other options do not directly align with the definition of limits of liability. Terms such as "cap amounts" and "deductible limits" relate to financial thresholds and out-of-pocket expenses, while "coverage limits" and "risk factors" pertain to broader insurance concepts rather than the specific definition of liability limits. Lastly, "premium rates" and "claim limits" describe costs and outcomes of claims rather than the liability limits themselves. Thus, the correct answer is contextualized within the insurance framework that defines the maximum possible payout under a policy.