What does the term 'aggregate' refer to in the context of deductibles?

In the context of deductibles, the term 'aggregate' refers to the combined losses over a specified period. This concept is particularly relevant in insurance policies where multiple claims may be filed within a certain time frame, such as a policy year.

An aggregate deductible means that the insured must pay up to a certain limit – the aggregate deductible amount – across all claims made during that period before the insurance company starts to cover any additional losses. This approach helps the insurer manage risks and encourages policyholders to be more cautious, knowing that they have a limit on the total amount of deductible they will pay within the period.

This understanding of 'aggregate' is key for individuals managing their insurance policies, as it impacts their potential financial exposure for multiple incidents occurring within that timeframe, rather than considering each incident's deductible separately.