Annual Aggregate Limit

Definition - What does Annual Aggregate Limit mean?

The annual aggregate limit is the maximum amount of coverage an insurance policy provides over a policy year. It is found in a wide variety of insurance types, such as auto, health, and property. Once covered expenses reach the annual aggregate, the policy stops paying out benefits, even if subsequent legitimate claims are filed. In many cases, it is the same as the aggregate limit as many policies only last for a year.

Insuranceopedia explains Annual Aggregate Limit

Insurance companies often include annual aggregate limits in their policies because it would simply cost them too much money to not limit coverage. For example, a car insurance policy may have an aggregate limit of $50,000 a year. This limit provides a solid amount of coverage without the insurance company having to pledge to providing too much. But without a limit, an insurer may have to pay out much more than $50,000 to cover an unfortunate driver who incurs many covered expenses for repairs or liability issues over a policy year.

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