Aggregate Deductible Programs Insurance

Aggregate Deductible Programs Insurance is a type of insurance policy that provides coverage for multiple losses or claims within a specified period, usually a policy year.  

• It is commonly used in commercial insurance, especially in the construction and liability insurance sectors.
• In an Aggregate Deductible Program, instead of applying a separate deductible to each individual claim, a single deductible is applied to the aggregate or total of all claims during the policy period. This means that the policyholder is responsible for paying the deductible amount only once, regardless of the number of claims made during the policy year.
• The aggregate deductible is generally set at a specific dollar amount or a percentage of the insured's total loss exposure.  Once the aggregate deductible is met, the insurance coverage kicks in, and the insurer starts reimbursing the policyholder for covered losses or claims.  However, if the aggregate deductible is not reached, the policyholder is responsible for covering the full cost of the claims.

What are the benefits?

• Aggregate Deductible Programs can be beneficial for policyholders who anticipate a higher volume of claims or losses within a policy year.
• It provides a way to limit the impact of individual deductibles on each claim and potentially save costs by consolidating multiple claims under a single deductible.