Even among experienced insurance agents I find confusion reigns on the definition and application of the two types of commonly sold Liability Limits. I see agents warning buyers to Beware of Split Limits, as if we might need to wash our hands after purchase.
In reality, this fear tactic is unwarranted, as either CSL or Split Limits may or may not be the best choice, because it all depends on the actual amount of the limits, not simply how they are applied in a covered loss.
Combined single limits of $50,000 to $100,000 can apply to either property damage or bodily injury. This is the maximum amount the insurance company will pay for covered damages you are shown to be responsible for. So, for example, if your limit is $50,000, you're covered for a maximum of $50,000. If your limit is $100,000, then your maximum coverage for either exposure is $100,000.
Liability losses you are covered for can be comprised of just bodily injury, just property damage, or a combination of the two. However, your maximum coverage limit depends on the amount of coverage you decided to purchase to begin with.
Split Limits such as $100,000 bodily injury per person/$300,000 bodily injury per accident/$100,000 property damage means that the insurance company is obligated to pay up to $300,000 in bodily injury claims depending on how many persons are injured & the extent of their injuries AND up to $100,000 in property damage.
For example: Let's suppose you have a choice between a $50,000 combined single limits or a policy that has split limits of $50,000 BI coverage per person, $50,000 BI coverage per accident, and $50,000 coverage in property damage.
Suggestion: We recommend a minimum limit of $50,000 Property Damage by itself in case you knock heads with someone else's brand new SUV.
I would personally choose the second option (B) of $50K per person, $50K per accident AND $50K for property damage, which protects you up to $100K against loss versus a CSL Limit of $50K in protection to cover everything.
If you're still confused about how much each type of coverage protects you, contact your own financial adviser and have him or her go over the different types of policies with you. This information is intended for educational purposes only.
Linden Gray is an international insurance veteran with 29 years of retail & direct insurance experience. Mr. Gray has been featured in many periodicals including RV Magazine, PE.com, Google, Yahoo, Digg & Buzzle. His website is: mexican tourist auto insurance.
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