If you are an adult, you likely have an insurance policy of some sort, whether it is an auto policy, renter’s insurance, health insurance or one of a dozen other common insurance products. If so, there are few terms you should know beyond claims and premiums. Terms like insurance aggregates, for example.
If you don’t know that term, don’t worry. Here are two insurance terms you need to know and their definitions.
1. Insurance Aggregates
If you ask your insurer what your aggregate is, he will share with you the maximum amount the carrier will pay for covered losses during your insurance policy period, typically 12 months. For example, if your aggregate limit is $10 million and you accrue $12 million in claims during the policy period, the insurer will only pay $10 million. You will be liable for the other $2 million.
2. Per Occurrence
Also called “per claim,” this term refers to the amount your carrier will pay per incident or per claim. So, for example, your per occurrence limit could be $10,000. If you file a claim against that for $11,000, the insurer will only pay the $10,000. You are responsible for the other $1,000. This hold true even if you haven’t reached your aggregate amount.
Now that you know these two terms, you can apply that knowledge when you shop for insurance. Great insurance agents will be sure to help as well.