What is the limit that the insurer will pay for all losses that occur during a policy period?

What is the limit that the insurer will pay for all losses that occur during a policy period?

• A. Aggregate Limit
• B. Per Claim Limit
• C. Sublimit
• D. Cap on Losses

Answer: (A)

The limit that applies to all losses accumulated during the policy period is the aggregate limit. It sets the maximum amount the insurer will pay in total for the entire term, no matter how many claims occur. For example, with an aggregate limit of 500,000, the insurer will pay up to that amount in total across all claims filed during the policy period, and once the total payments reach that cap, no additional payments are made for the remainder of the period. In contrast, a per-claim limit caps payment for each individual claim, not the sum of all claims, and a sublimit is a smaller cap within the overall limit for a specific type of loss. Cap on losses isn’t the standard term used here.

The limit that applies to all losses accumulated during the policy period is the aggregate limit. It sets the maximum amount the insurer will pay in total for the entire term, no matter how many claims occur. For example, with an aggregate limit of 500,000, the insurer will pay up to that amount in total across all claims filed during the policy period, and once the total payments reach that cap, no additional payments are made for the remainder of the period. In contrast, a per-claim limit caps payment for each individual claim, not the sum of all claims, and a sublimit is a smaller cap within the overall limit for a specific type of loss. Cap on losses isn’t the standard term used here.