Annual Aggregate Limit

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Retention of risk by the policyholder, calculated on the basis of retention of claims in total over a year. In other words, it’s the maximum dollar amount an insurer will pay to settle a claim within a single year.

If an annual aggregate limit on a policy is $25 million, which then receives claims of $35 million within the policy period, the insurer will only pay up to the $25 million limit.

 

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