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Aggregate Limit

Aggregate Limit

What Is an Aggregate Limit?

An aggregate limit is a maximum amount an insurer will repay a policyholder for all covered losses during a set time span, normally one year.

Insurance policies commonly set caps on both individual claims and the aggregate of claims. For instance, in the event that a company's annual aggregate coverage limit is $20 million, and claims totaling $25 million are documented in a policy period, the insurance company will pay just $20 million.

Health care coverage plans often carry aggregate limits.

This is a contractual clause and may likewise be alluded to as a general aggregate limit.

Figuring out the Aggregate Limit

As noted, insurance policies often set limits on the amount that is paid on an individual claim and the total paid to the policyholder more than a year.

For instance, a liability policy may have a $25,000 per claim limit and an aggregate limit of $100,000. If the insured makes a single claim for $50,000, the insurance company pays just $25,000, the per claim limit, even however it is under the aggregate limit. The aggregate limit is presently $75,000. A second $50,000 claim in a similar period results in another $25,000 payout and a diminished aggregate limit of $50,000. Subsequent to arriving at the aggregate limit, the insurer pays no extra claims during the policy period.

An insurance policy may likewise have "sub-limits." That is, there may be caps on claims for a specific type of loss, for example, flood or tremor damage.

Medical services Aggregate Limits

As in the model above, medical coverage plans often have a cap on per claim payments and a cap on annual claims payments.

A policy may likewise have sub-limits that cap the amount that will be repaid for specific types of loss or damage.

A family dental plan will pay a set amount for each filling, cleaning, or crown claimed by the family. The policy will likewise hold the family to an annual aggregate limit for payment for claims. Assuming that the family surpasses the annual limit, they must pay the expenses out of pocket until the next policy term starts.

Adapting to Aggregate Limits

A few policyholders get insurance specifically to cover any catastrophic loss that surpasses the aggregate limits on their normal policies. For an extra cost, numerous insurers offer supplemental plans that give coverage over the base plan's aggregate limit. These may have a specific yet a lot higher limit or no restriction.

Employers that self-store employee healthcare plans might utilize comparable stop-loss insurance to safeguard against catastrophic claims. In a self-subsidized plan, the employer pays the claims introduced by its employees up to an aggregate limit. This standard policy might leave the employer responsible for paying out-of-pocket for costs that surpass the aggregate limit.

Comparable stop-loss coverage is accessible for laborers' compensation claims.

The employer might get a stop-loss policy that repays the employer for the amount that surpasses the aggregate limit.


  • Insurance policies often place limits on both the size of individual claims and the aggregate claims repaid.
  • An organizations purchase stop-loss insurance notwithstanding their ordinary plans to cover any catastrophic losses.
  • An aggregate limit caps the total amount that an insurer will pay a policyholder for a set time frame period.