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Limits Reduction Provision

"Limits Reduction" Provision


"Limits Reduction" Provision — a term used in connection with uninsured and underinsured motorists (UM/UIM) coverage to refer to limit of insurance provisions that apply (in some states) to set out how UM/UIM coverage is affected by the existence of other types of coverage (e.g., auto medical payments, workers compensation) that may apply as well. Under limits reduction, the limit of insurance under UM/UIM is reduced by payments from other types of insurance, as specified in the applicable UM/UIM endorsement.

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