Aggregate Limit

Definition - What does Aggregate Limit mean?

An aggregate limit is the highest amount of money an insurer will pay out to settle claims in a given time period. It is commonly known as an annual limit as the time period is commonly a year. Once the claims amount to this limit, the policyholder must cover any expenses thereafter.

Insuranceopedia explains Aggregate Limit

Insurance companies often place aggregate limits on their policies so that the amount they may have to pay out in claims is not infinite. Without such limits, insurance companies would likely have trouble remaining financially solvent due to having too many obligations. Aggregate limits help insurers keep their obligations in line with their ability to pay them while still making a profit. If a person files claims in a policy year that exceed the aggregate limit, then they would have to pay out of pocket for the excess amount.

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