What is a per resident aggregate and should I want one?

Most liability programs have two limits: a per occurrence limit capping any one claim, and an annual aggregate capping everything in the policy year. A per resident aggregate inserts a third, capping everything arising from one resident regardless of how many separate occurrences are alleged.

It exists because senior care produces clustered claims. A resident whose care deteriorated may generate allegations about falls, wound care, medication management and nutrition, brought together or in sequence. Whether those are one occurrence or several is genuinely arguable, and a per resident aggregate is one way of settling the argument in advance.

If the per resident aggregate is set at or near the per occurrence limit, it functions as a ceiling on the whole resident file. A case that would otherwise have drawn on the per occurrence limit for the fall and again for the wound is now capped once.

That is the scenario worth checking, because the clustered claim is exactly the shape senior care produces most. Ask what the per resident aggregate is relative to the per occurrence limit, and ask what happens when a single resident produces claims in two consecutive policy years.

Occasionally an insurer offers a per resident aggregate set above the per occurrence limit as a way of providing more room for a clustered file than a single occurrence limit would. In that structure it is a benefit rather than a cap.

The determining question is always the same: is the per resident number above or below what the per occurrence limit would have provided across the same set of allegations? If below, it is a restriction being presented as a feature.

Even without a per resident aggregate, the definition of occurrence matters enormously in this class. A policy that treats continuous or repeated exposure to substantially the same conditions as a single occurrence will aggregate a course of care into one claim; one that does not may treat each incident separately.

Neither is universally better. Aggregating helps when it means one retention rather than four; it hurts when it means one limit rather than four. Read the definition and work out which way it cuts for the claim shape you actually have.

If a per resident aggregate is being introduced, treat it as a coverage change rather than a technicality and price the program with and without it.

If you already have one, find the number, compare it to the per occurrence limit, and model it against your worst historical resident file rather than your worst single claim. Those are different numbers, and in this class the first one is usually larger.