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The better choice is not simple to pick out

Split or Combined Single Limits?

If you look at your automobile insurance policy's Declarations, your Liability limits most likely look very much like one of these three choices:

Bodily Injury
Liability Coverage
  Property Damage
Liability Coverage
Each Person / Each Accident / Each Accident (commonly known as)
$50,000 / $100,000 / $10,000 "50/100"
or
$100,000 / $300,000 / $50,000 "100/300"
or
$250,000 / $500,000 / $100,000 "250/500"

At the gut level, a typical consumer sees ''100/300'' and thinks "I have $300,000 worth of coverage." Which is correct. Except that its not. Its more complicated than that.

Even though its known as ''100/300'', there is that third limit in there that people don't vocalize when they use the shorthand reference. In the case of this example, its $50,000, so ''100/300'' is really ''100/300/50'', fully written out. Having gotten that out of the way, what do each of the three numbers mean?

  • 300 is $300,000 the overall limit for each accident.  This is the total payout for Bodily Injury Liability damages that your insurance company will pay for a given accident (for example: medical bills of people injured by you in an accident that was your fault).
  • 100 is a $100,000 individual payment limit for each person within a given accident.  While you may have $300,000 in total coverage, a single individual can be paid no more than $100,000 for bodily injury sustained in an accident.
  • 50 is $50,000 for property damage caused during an accident.  For example, if you collide with another auto and its your fault, it is this coverage that pays for the other party's auto repair or replacement.

Split Limits Not Good Enough?

It is easy to concoct a scenario where the coverage limit described above - which is extremely common - is inadequate.  If for example you bash into (and total) a brand-spanking-new Corvette, that $50,000 Property Damage limit is not going to cover the entire loss (hence the reason you select a higher Property Damage limit).

A Combined Single Limit is one solution to the above scenario.  With CSL limits your Liability insurance limits look like this:

  • $300,000 ea. Accident

No sub-limits.  Whatever needs it gets it up to the policy limit of $300,000.  That is simpler to understand, to be sure, and it does seem to be a better way to do the same job, which partly explains why such policies tend to be more expensive.

But is it always better? (click for Page 2)

Matt Robertson's small picture
Article by
Matt is the Managing Partner at Leland-West Insurance Brokers, Inc. He started with the firm while still a college student, way back in 1984. According to Matt his only remaining hobby is Motorsport ... because its all he can afford ("will work for tires"). Reach him at matt@lelandwest.com