Ace the Alberta General Insurance Level 1 Exam 2026 – Insure Your Success Today!

The concept of "aggregate limit" in insurance refers to the maximum amount an insurer is obligated to pay for all claims that arise during a specified policy period. This limit serves as a cap on the total payout the insurer will make, regardless of the number or size of individual claims that occur within that timeframe. For example, if an insurance policy has an aggregate limit of $1 million, the insurer can only pay up to that amount for all claims combined throughout the policy term.

This feature is particularly important for businesses that might face multiple claims in a single year, as it helps manage risk and financial exposure. Understanding the aggregate limit is crucial for ensuring that the coverage is adequate for the anticipated risks and potential claims within that period.

In contrast, the maximum amount an insurer will pay for a single claim is referred to as the "per occurrence limit," while the total premium paid by the insured is not related to limits of coverage but rather to the cost of the insurance policy itself. The minimum coverage required by law pertains to specific mandates for insurance limits in areas such as auto insurance and does not describe aggregate limits.