In the insurance industry, the term “aggregate” refers to the total amount of coverage or benefits provided under a policy. In the context of a liability insurance policy, the aggregate limit is the maximum amount that the insurance company will pay out for claims during the policy period. Once the aggregate limit has been reached, the policy will no longer provide coverage for any additional claims.
For example, if an insurance policy has an aggregate limit of $1 million, and the policyholder makes three claims totaling $900,000 during the policy period, the policy will still provide coverage for additional claims up to a maximum of $100,000 ($1 million aggregate limit minus the $900,000 in claims already paid).
In some cases, insurance policies may have both a per-occurrence limit and an aggregate limit. The per-occurrence limit is the maximum amount that the insurance company will pay for a single claim, while the aggregate limit is the maximum amount that the insurance company will pay in total for all claims during the policy period.
Policyholders should be aware of the aggregate limit of their insurance policy and understand how it may affect their coverage. It is important to carefully review the terms and conditions of an insurance policy to understand the limits and exclusions of the coverage.