Leland West Insurance

Split or Combined Single Limits?

The better choice is not simple to pick out

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.

Not So Bad After All?

Maybe not.  Most articles describing Split vs. CSL limits stop right about here.  Here is what is commonly missing:  Full discussion of the Property Damage limit. As was previously stated, the "$100,000 each Person" part of "100/300" is a lesser sublimit inside of the $300,000 Bodily Injury coverage. However the $50,000 Property Damage Liability limit is not.  Its spoken of in the same breath, and it has the word ''Liability'' in it, but the coverage is different and its limit stands on its own.  As such, someone with "100/300/50" actually has $300,000 in Bodily Injury coverage and an added $50,000 in Property Damage Liability coverage. That gives you a total of $350,000 in potential coverage compared to the CSL policy's total of only $300,000.  

Now the 'split limit' policy isn't looking quite so bad.  Especially if you bump up your Property Damage coverage for what should be a very small charge.  If 100/300/50 isn't quite enough, how about 100/300/100? Thats a total of $400,000 in potential coverage.

But before we start cranking up those limits on all of our cars, lets consider the separate but related issue of your personal Umbrella insurance policy. If you have enough income and financial comfort to be owning multiple automobiles, some of which are simply weekend pleasure cruisers, chances are you have enough personal assets to make an Umbrella a necessity to protect your home and assets.

In making a decision on your auto insurance limits, you need to know at what point the Umbrella will pick up and start paying out.  You will have to read the Underlying Coverages portion of your own Umbrella to be sure, but chances are good the number is either $100,000/$300,000/$50,000 or $300,000 CSL (both are commonly accepted within the policy).  In other words, if your Umbrella picks up and starts paying out at $100,000 (each Person), $300,000 (each Accident), and $50,000 (Property Damage) ... why pay the extra money for $300,000 CSL, or even for more Property Damage coverage?  Your Umbrella is already doing that job (and much more) for the same price.

Your Next Step

Don't look to this article to answer your specific insurance needs... What it should do instead is get you to pick up and read a copy of your auto insurance policy Declarations.  Decide if the limits you have now need improvement.  Next, dig out that Umbrella policy and read the Underlying Coverages section. You may find you are paying for some of your auto insurance coverage twice.

You may also find an entirely different kind of common and very nasty mistake.

Matt Robertson's small picture
Article by
Matt Robertson
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