Annual Aggregate Deductible — (1) A deductible-type program under which the insured agrees
to reimburse its insurer for its own losses during the policy year up to the
agreed upon annual aggregate amount. Once the insured has paid losses up to
that amount, the insurer pays the remainder of losses for the annual period
without seeking reimbursement from the insured. (2) The amount
by which a loss or applicable coverage limit is reduced in order to determine
the amount of the insured's recovery. In standard property insurance
practice, the deductible amount is subtracted from the amount of the adjusted
loss; the insurer pays this reduced amount, and the insured is responsible for
the deductible amount.