In the insurance industry, the aggregate limit is a well-defined threshold representing the maximum amount of money that a policyholder will receive from the insurer to cover losses while the policy is valid. In the car insurance sector, frequently, this period is one year, but it could be different.

Regardless of the number of claims made during the policy’s lifetime, the aggregate limit is always there. There will not be any other eligible claim under the policy when this boundary is outdone.

Let’s suppose that you get first-month free car insurance policy and your aggregate limit is \$20000.00. Then, you could make two claims of \$10000.00, or five of \$4000.00, or any other number up to the aggregate limit. Nevertheless, if you have made three claims of \$7000.00, then you could pay the first two in full, and the last one could only be paid to the amount of \$6000.00, and then, you would need to make up the remaining \$1000.00 out of your own pocket.

## Per-Claim Limit: What Is This?

The maximum amount of money an insurance provider could pay on a single claim made under a policy is defined as a per-claim limit. Sometimes, the per-claim limit is the same number as the aggregate limit. If this happens, when the first claim is at the limit or above it, no additional claims could be made under that policy against the insurance provider. The per-claim limit could also be set at a portion of the worth of the policy.

Taking the previous example, \$20000.00 of aggregate limit, the per-claim limit of the policy could be \$5000.00. Then, in the case of the previously mentioned three claims of \$7000.00 each, the insurance provider would pay only \$5000.00, and the claimant would have to pay the rest on each claim, \$2000.00. Still, there would be \$5000.00 left below the aggregate limit, permitting one claim for \$5000.00 or more that adds up to this amount.

### What Is the Objective of The Aggregate Limit?

The aggregate limit could be helpful for the insurance provider and also for the insured. Using the aggregate limit, the insurance companies would cover themselves from being exposed to high levels of risk that the premiums could compensate. In the case of the customers, the aggregate limit allows them to decide if their auto insurance coverage is suitable.

### What Should You Do If Your Policy’s Aggregate Limit Is Low?

Sometimes evaluating the specific characteristics of each driver, if you pay car insurance under \$50 a month, you can increase your aggregate limit if you pay a bigger premium to your insurance provider. Commonly, this bigger premium is not very expensive. Therefore, it could be a wise financial choice to spend your money paying this extra charge. It would be better than facing higher legal responsibilities in case of an accident.