An aggregate limit is a total cap on the insurer’s payments for a category of coverage across the policy period.
Insurance mechanics
Think of it as a budget for the year or term. Each covered payment reduces the remaining room under the aggregate. The aggregate applies after individual per-claim limits and can coexist with deductibles, waiting periods, and sublimits.
The clause can apply separately for lines of coverage, such as bodily injury only or property only, depending on policy wording.
Claims and claims-adjusting logic
Claims staff track payment order carefully. Once aggregate is exhausted, no further covered indemnity is payable for that period unless endorsements restore limits.
Adjusters also reconcile prior payments against the correct trigger period and classification so a later claim is not misclassified under the wrong deductible or limit bucket.
Underwriting and pricing context
Higher aggregate limits increase expected loss exposure and usually raise premium. Carriers may require stronger controls, higher risk retention, or coinsurance where aggregate exposure is broad.
Practical scenario
An insured buys a general liability policy with a $2,000,000 aggregate limit and a $1,000,000 per-occurrence limit. A claim for $1,500,000 would be capped at $1,000,000 if one per-occurrence breach occurs. A second $800,000 claim later in the year then pushes total paid to $1,800,000, leaving $200,000 of aggregate capacity.