As with any type of insurance, car insurance policies come with limits—the maximum amount an insurer can pay for third-party accident losses and damages. In many states, an auto policy will have either a combined single limit (CSL) or split limit liability. Read on to understand what these limits mean for automobile insurance.
Split Limit Liability Insurance
Split limit liability insurance has a specific limit for each of its three separate coverage components, namely:
- bodily injury liability for each auto accident victim,
- bodily injury liability for each car accident, and
- property damage liability.
For instance, on a typical auto policy, split limit liability may be specified as 250,000/500,000/250,000.
In such a scenario, a car insurance policy would pay up to $250,000 to cover medical costs for any single person injured in an accident for which you’re deemed liable. If two people were injured in that accident, the policy would cover their medical expenses up to $500,000. In this case, none of the injured persons would be allocated more than $250,000 for their bodily injuries.
The third component in the above example has a $250,000 coverage limit. That means, in addition to covering medical expenses for bodily injury, the policy would pay to repair the other motorist’s damaged car up to $250,000. Assume the two people who got injured incurred $500,000 bodily injury costs, and their car worth $70,000 was damaged in the at-fault accident. A 250,000/500,000/250,000 split limit liability policy would then pay a total of $570,000 to cover bodily injury and property damage.
Combined Single Limit (CSL) Liability Insurance
A CSL policy has an overall auto coverage limit. It doesn’t have separate maximum coverages for injury per individual, injury per accident, and property damage per accident. If you have such a policy and are involved in an at-fault auto accident, your insurance coverage will pay up to a specified amount.
Take the scenario of a $500,000 CSL car insurance policy. In an at-fault accident that results in bodily injury and treatment costs amounting to $400,000, the policy would comfortably settle this third-party liability claim.
If the at-fault driver had a $250,000/$500,000 split limit liability policy, they wouldn’t be sufficiently covered for the $400,000 bodily injury claim. Their policy would only pay up to $250,000 in third-party medical expenses, leaving the motorist underinsured by $150,000.
Consider a different scenario wherein two people are injured in an auto accident, each filing a bodily injury claim of $250,000. Assuming that the victims also incurred $70,000 in car damage, a $500,000 CSL policy wouldn’t cover the extra $70,000.
Should You Buy a Split Limit or CSL Auto Insurance Policy?
It’s difficult to foresee which one of the two options may work in your favor. Either can be ideal for the policyholder, depending on the specifics of the auto accident. The uncertainty of car accident outcomes and the ever-increasing medical and auto repair/replacement costs make it important to increase coverage limits to maintain comprehensive auto insurance protection.
Many motorists not only increase the limits on their policies but also purchase extra riders to avoid being underinsured. For example, umbrella liability policies are usually an affordable way to expand your auto liability protection. They’re an excellent option for maximizing coverage where the limits on your policy aren’t sufficient enough to protect you from financial loss when facing large liability claims.
Whether you choose CSL or split limit liability insurance, be sure to buy the maximum possible limit for comprehensive protection. Contact our experts at C.V. Mason Insurance Agency if you’re looking for maximum auto liability insurance protection. We can help you top up your coverage with the necessary riders.