Question 57

Aggregate

The aggregate policy limit is the total maximum amount that an insurer will pay for all claims during a policy period. Unlike other limits, the aggregate limit does not get restored after payments on losses are made, meaning once it is reached, no further claims can be paid under that limit until the next policy period.

A) Per person

The per person limit refers to the maximum amount payable for injuries to a single individual in a claim. This limit is restored after losses are paid, as it is applicable to each claim separately and does not accumulate across multiple claims.

B) Aggregate

The aggregate limit is unique in that it encompasses the total amount payable for all claims within a policy period. Once this limit is reached through payments on losses, it is not restored until the next period, making it the correct answer to the question.

C) Per accident

The per accident limit specifies the maximum amount payable for all claims arising from a single accident. This limit is restored after payment, allowing for multiple claims to be made in subsequent accidents without impacting the limit.

D) Occurrence

The occurrence limit applies to the maximum amount payable for claims arising from a specific event, regardless of the number of claims. This limit is also restored after payments, allowing continued coverage for future occurrences.

Conclusion

The aggregate limit is distinct in that it does not get restored after payments, which is why it is the correct answer. In contrast, the other limits—per person, per accident, and occurrence—are designed to be restored, ensuring ongoing coverage for various claims within their respective scopes. This highlights the fundamental differences in how policy limits function in insurance coverage.