What does the term "coverage amounts" refer to in a property insurance policy?

In property insurance, the term "coverage amounts" specifically refers to the maximum amount payable for a claim under the policy. This amount dictates the insurer's liability in the event of a covered loss and determines how much the policyholder can expect to receive in compensation for damages or loss sustained to their property.

For instance, if a property is insured for $250,000, that is the coverage amount, meaning that in the event of a total loss destruction, the insurer would pay up to that limit. Knowing this maximum limit is vital for policyholders as it helps them ensure they have adequate coverage based on the value of their property and potential risks.

The other choices can be related to property insurance but do not accurately define "coverage amounts." The total value of the property might influence the coverage amounts but does not represent the term itself. Likewise, the estimated cost of the property could affect how coverage amounts are determined, but it is not a direct reference to them. Finally, the total premiums paid relate to the costs of maintaining the insurance policy rather than the limits on claims that the policy can cover.