Los Angeles Claims Adjuster Property and Causality Practice Exam

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What is the term for the limit in a policy that represents the total amount for all claims paid during the policy period?

  1. Single limit

  2. Supplementary payments

  3. Aggregate limit

  4. Loss payable clause

The correct answer is: Aggregate limit

The term that represents the total amount for all claims paid during the policy period is the aggregate limit. This limit is important because it caps the insurer's financial obligation for covered claims throughout the term of the policy. If a policy has an aggregate limit, once the total amount of paid claims reaches that limit, no further claims will be paid under that policy until it is renewed, or until the term resets. Understanding this concept is crucial for policyholders and adjusters alike, as it impacts the amount of coverage available in case of multiple claims occurring within the policy period.