Question: How does split limit differ from combined single limit insurance coverage?

Answer: Single-limit auto insurance coverage allows you one single amount of coverage that can be used as needed for either bodily injury or property damage liability insurance.

This single amount is your maximum limit, so the most the insurance company will be obligated to pay for damages resulting from one single accident. It can also be termed a combined single limit (CSL).

For example, suppose the limit for the CSL is $200,000 per accident. In that case, that is the total that the insurance provider will pay for all bodily injuries and property damage caused in one accident, no matter the number of people injured or what the portion of bodily injury or property damage is. Thus, if you total out an expensive $70,000 car and the driver has $110,000 of medical bills, this CSL policy will cover both the bodily injury and property damage claims fully since $180,000 is below the $200,000 maximum limit.

Split limit coverage splits the coverage amount into three limits, such as 50/100/25. Under the split limit coverage, these numbers would mean that you have $50,000 of bodily injury coverage per person per accident, $100,000 total for all injuries per accident, and a $25,000 limit for property damage done in one accident.

In the same accident as mentioned above, the split limits would cover only $50,000 of the medical expenses of the driver and only $25,000 of the vehicle’s value. This leaves the at-fault policyholder over the property damage liability limits by $45,000 and $60,000 over the bodily injury per person liability limit. Thus, the policyholder in this situation could be personally sought after for these amounts.

The basic difference between a combined single-limit policy and a split-limit policy is that the split limit requires multiple limitations to the policy. In contrast, single-limit coverage gives you one amount of coverage to use as needed for the expenses resulting from an auto accident.

The split limit has the portions of payment limits already designated. In contrast, the combined single limit policy can give a policyholder flexibility to use the entire coverage for bodily injury and property damage as it is needed to be allocated between the different expenses.

The availability of these different forms of coverage varies from insurance company to insurance company and may also depend upon state insurance laws.

 — Michelle Megna contributed to this story.

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Contributing Writer

Prachi is an insurance writer with a master’s degree in business administration. Through her writing, she hopes to help readers make smart and informed decisions about their finances. She loves to travel and write poetry.