Aggregate Annual Deductible

Aggregate Annual Deductible

In insurance, the maximum amount that a policyholder must pay for a claim before the insurance company will make any payments at all. That is, if one or more insured events happen in a given year, the policyholder is responsible for covering damages up to a certain dollar amount, at which point the insurance company begins coverage. Because the deductible is calculated annually, if two insured events happen in a year, the deductible is only applied once. Generally, the higher one's deductible is, the less one pays in premiums on the policy.
References in periodicals archive ?
For private reinsurance programs, probable season loss analysis will generally indicate the need for more low-layer limits, increased use of aggregate annual deductibles on lower layers, and use of aggregate stop-loss covers to supplement excess-of-loss covers.