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The sum insured (or limit of indemnity) is the maximum amount covered by the insurer in the event of damage.
a) Limited sum insured:
The insurer covers no more than the agreed amount in the event of a claim. If the amount of damage exceeds the sum insured, the policyholder has to pay for the difference. This situation is called underinsurance.
a) Unlimited sum insured:
If there is no limit to the sum insured, the amount of damage is irrelevant.
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