Aggregate Limit
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Aggregate Limit
ag-ri-gut lim-it
Aggregate limit is the maximum total amount an insurance company will pay for all claims during a policy period, usually one year.
It does not matter how many claims are made — once this total limit is used up, the insurer will not pay any further claims in that period.
In simple terms, it is the total yearly cap on all payouts combined.
Key points:
• Common in liability, health, and commercial insurance
• All claims during the year are added together under one limit
• Once the limit is exhausted, no further claims are covered
• Different from per-claim limits, which apply to each individual claim
A small chain of cafés in Bengaluru bought a public liability insurance policy with an aggregate limit of ₹50 lakh for the year.
Over eight months, three claims were paid: ₹6 lakh, ₹3.8 lakh, and ₹7.2 lakh — totaling ₹17 lakh. This amount was deducted from the ₹50 lakh limit, leaving ₹33 lakh available.
When another incident occurred, the insurer first checked how much of the aggregate limit was still unused before approving the claim. This showed how all claims during the year draw from one combined pool.
liability insurance
group health insurance plans
IRDAI
ACA
Definition
Aggregate limit is the maximum total amount an insurance company will pay for all claims during a policy period, usually one year.
It does not matter how many claims are made — once this total limit is used up, the insurer will not pay any further claims in that period.
In simple terms, it is the total yearly cap on all payouts combined.
Key points:
• Common in liability, health, and commercial insurance
• All claims during the year are added together under one limit
• Once the limit is exhausted, no further claims are covered
• Different from per-claim limits, which apply to each individual claim
Case Study
A small chain of cafés in Bengaluru bought a public liability insurance policy with an aggregate limit of ₹50 lakh for the year.
Over eight months, three claims were paid: ₹6 lakh, ₹3.8 lakh, and ₹7.2 lakh — totaling ₹17 lakh. This amount was deducted from the ₹50 lakh limit, leaving ₹33 lakh available.
When another incident occurred, the insurer first checked how much of the aggregate limit was still unused before approving the claim. This showed how all claims during the year draw from one combined pool.
Historical Reference
liability insurance
group health insurance plans
IRDAI
ACA
Illustration
