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Split Limits vs Combined Single Limits

Combined Single Limit, Bodily Injury, Property Damage and Split Limit Liability insurance are all types of Automobile Liability insurance available to consumers. Many individuals don’t realize that Liability insurance is the minimum required insurance in most states. Accidents happen. Will you have the right coverage for the situation? 

How covered are you?

Read through your policy on your own or contact one of our agents, who would be happy to go over the language with you. You will find this in the exact wording of the insurance policy, or it will be stated on the declaration page at the front or you insurance packet. There you will also see what your coverages are per each type. 

Split Limit Liability Coverage
A standard Split Limit Liability coverage is broken down as a 100/300/50 split. This means that $100,000 is for each person, $300,000 for each accident, and up to $50,000 for any property damages.

Combined Single Limit Coverage
Combined Single Limit Liability insurance is a set number that the insurance company will pay which includes Liability and Property Damage coverage. This means that you can select a set amount of coverage at the time of the policy being set up, which in turn will protect you in the event of an at fault accident. An example of this would be if you chose to carry $300,000 of Combined Single Limit coverage, you would be protected for both Liability and Property Damage coverage up to that $300,000 amount total in a single accident, regardless of how much the Property Damage is, versus the Liability payout. This option provides the most complete Liability coverage, as there is not split differential between the three main components of personal injury, accident damage, or personal property damage.

Combined Coverage vs. Split Limit Coverage
When you have an accident you are going to be given the exact limit that your policy states. For example, if you have an accident and have a standard 100/300/50 split you might not be covered fully. Let's assume that your accident caused $225,000 in damages and injury. You would think that the $300,000 total accident limit would cover, but it falls short. If two people were injured with $165,000 of injuries (one at $15,000, and the other at $150,000), coupled with $60,000 in physical damages, you would still be liable for $60,000 in payments. This is because the sub-limits of $100,000 medical and $50,000 for property have been surpassed.

Combined Single Limit Supersedes Sub-limits
In the event of that very same accident, with a Combined Single Limit Liability insurance policy, you would be fully protected. This is because your total limit is $300,000. There are no differentials in what is paid out to what. The entire cost of all the injuries and damages are combined together to make one single payout. This supersedes any type of individual limits.

What is Single Limit Liability coverage?

Single Limit Liability coverage is Auto insurance that provides one flat amount for coverage limits. For example, a policy owner may choose total per incident Liability coverage of $300,000. This amount would include any and all claims for a single accident for bodily injury and property damage. Also, the limit would be applied for everyone involved in the accident, so that everyone would share in the limit of $300,000 in our example.

Single Limit Liability vs. Split Limit Liability Coverage
While Single Limit Liability auto insurance coverage provides one limit cap over an entire accident incident, Single Limit Liability coverage divides the coverage limits up over 3 areas--one amount for bodily injury per person, one amount for bodily injury for the accident and one limit for property damage for the incident.

Using the example above, the Single Limit Liability amount is $300,000 for the entire incident. However, with Split Liability coverage, the Liability limit caps might be $100,000/$300,000/$100,000. This breaks down to $100,000 medical bodily injury coverage per person, $300,000 bodily injury coverage for the entire accident and $100,000 total property damage limits.

Advantages of Single Limit Liability Coverage
For persons with assets such as a home or business, a Single Limit Liability policy can prove quite advantageous.

A Single Limit Liability coverage policy virtually eliminates the need for an umbrella policy to protect from auto insurance law suits. This is because having a single "pot" for claims for an accident enables an insurance carrier to divide the entire limit amount as needed according to the related claims. For example, if an accident results in a high amount of property damage but very little bodily injury, the bulk of the claims will be dedicated toward property damage claims payouts.

In many cases, carrying a Single Limit Liability coverage policy will actually result in limits that are more than adequate to cover any claims that result from an accident. This is in contrast to Split Limit Liability coverage, which very often results in a gap between actual claims and limits on the coverage. The result of this situation is very often a personal injury law suit against the policy holder in an attempt to recoup any unpaid expenses, placing home and businesses at risk.

If you find yourself at fault in an accident, you would not be limited by a pre-set damage amount and therefore responsible for paying the difference between what your own policy covers and the balance of the claim made by the injured. Ultimately, Single Limit coverage can prove very cost effective.

Disadvantages of Single Limit Liability Coverage
Single Limit Liability coverage is often more expensive than Split Limit coverage. For individuals with no assets to protect, and who wish to avoid higher auto insurance premiums, the benefits of a Single Limit Liability policy will probably not outweigh the disadvantages enough to justify the higher premiums.

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