What does “aggregate” mean in the insurance industry?
The Simple Meaning of Aggregate in the Insurance Industry
The definition of aggregate in the insurance industry is a group made up of different parts and from diverse origins. Aggregate in insurance refers to liability limits, deductibles and certain types of insurance for insurance providers (called reinsurance).
Commonly, the definition of the term aggregate is used in reference to insurance regarding the total amount a policy will pay for all specified damages during a set period of time, usually a calendar year. Damages above the aggregate limit are the sole responsibility of the policy holder causing the injury or damages.
Aggregate also refers to deductible amounts the policyholder pays, usually on an annual basis for losses. This is referred to as the annual aggregate deductible in insurance language. The insurance company will pay the policyholder the losses above the aggregate deductible in a year on all losses occurring within the aggregate deductible year period that the policy covers. The benefits of aggregate limits of liability on insurance policies allow the provider to figure out and approximate annual costs fairly accurately. Therefore, the policyholder knows in advance how much in damages they will be liable for in the event of a loss. The policyholder can more accurately determine the amount of aggregate deductible insurance that they can afford.
The “Aggregate excess of loss reinsurance” is the additional or secondary insurance that kicks in when the primary aggregate insurance has paid the maximum. Insurance providers and individual consumers both sometimes carry these additional policies for added protection. It is important to know the limits of liability and deductibles and if aggregate amounts apply.
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Read more: What Does Aggregate Mean in Insurance? | eHow.com http://www.ehow.com/about_7406952_aggregate-mean-insurance_.html#ixzz1FUnYeE3t
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