Many states give drivers the option of purchasing split limit car insurance or combined single limit car insurance. What’s the difference? Which one is right for you? Today, we’re explaining the difference between combined single limit and split limit car insurance.
Both Policies Cover Two Types of Liability
First, let’s explain what the two policies have in common.
Both combined single limit (CSL) and split limit liability insurance provide coverage for two types of liability:
All states that require car insurance also require you to have the two coverage types above. You’re required to have a certain amount of bodily injury liability coverage and property damage coverage. Bodily injury liability coverage covers the medical expenses of anyone you injure in an at-fault collision. Property damage liability coverage covers the cost of repairing any property you damage in an at-fault collision – like the other vehicle.
Your insurance company will cover bodily injury and property damage up to your coverage limits. If your plan has $50,000 of bodily injury coverage and $30,000 of property damage coverage, then your insurance company will pay up to those limits.
What is Split Limit Liability Insurance?
A split limit auto insurance policy will be expressed as three numbers. It will look something like this:
Here’s what each number means:
$125,000: The first number is the bodily injury liability coverage per person. Your insurance company will pay up to $125,000 in bodily injury damages for each person involved in the collision.
$250,000: The second number is the bodily injury liability coverage per accident. The insurance company will pay up to $250,000 in bodily injury damages in total per accident.
$100,000: The final number is the property damage liability coverage. This number is independent of the first two. It specifically covers damage to the other vehicle and other property. If you damaged someone’s SUV, for example, and it requires $45,000 worth of repairs, then your car insurance company would cover that amount.
With split limit liability insurance, there are clearly defined limits on each part of your policy.
In the example above, your insurance could pay out a maximum of $350,000 in total. However, no single person in the accident can exceed $125,000 in claims. And, even though you have $350,000 of total coverage, your insurance will only cover $100,000 of property damage.
What is Combined Single Limit (CSL) Liability Insurance?
Combined single limit (CSL) liability insurance combines all of your coverages into one single policy. All of your claims are paid out under the same coverage limit, up to the amount stated on your declarations page.
In the example above, you have $350,000 of total coverage, but that coverage is split into different groups according to bodily injury coverage and property damage coverage.
With combined single limit liability insurance, there would be no such split. You would receive $350,000 in total coverage that can be spent on any claims.
Combined single limit policies aren’t written as a series of three numbers. Instead, they’re written as a single number. The policy might be expressed as something like this:
This means that you have a total of $500,000 in coverage that can be used for medical expenses, property damage, and other claims.
Why Choose a Combined Single Limit Policy?
To illustrate the difference between combined single limit and split limit policies, let’s give an example.
You get into an accident with a high-end SUV. It’s your fault.
There are three people in the other vehicle. Each person requires $125,000 in medical treatment following the collision. There is also $50,000 of damage to the vehicle.
Here’s how this accident breaks down with a combined single limit policy and a split limit policy:
Combined Single Limit
Fortunately, you have a $450,000 CSL policy. With your CSL policy, your car insurance will cover up to $450,000 of claims per accident. The medical expenses and car damage total $425,000. Your car insurance covers everything.
Under a split limit policy, you wouldn’t be so lucky – even if you technically had the same coverage. Let’s say your split limit policy offers $125,000/$250,000/$300,000 of coverage.
With a split limit policy, your car insurance would cover the medical expenses of two of the injured people. Your car insurance company agrees to cover $125,000 per person and $250,000 per accident. Two of the passengers are completely paid for by your car insurance company. Additionally, the $50,000 of damage to the other vehicle is covered by your $300,000 property damage coverage.
Unfortunately, your car insurance bodily injury liability is now maxed out, but there’s still $125,000 of medical bills to pay.
Technically, your policy provides $550,000 of total protection, which should be enough to cover the $425,000 of claimed damages from the collision. However, because your policy is a split limit policy, your coverage needs to be spent a certain way. You’ve maxed out your bodily injury liability coverage, which means you’ll need to pay the remaining amount – the extra $125,000 of medical expenses for the third passenger – out of pocket.
Combined Single Limit Versus Split Limit: Which One is Better for You?
We can’t decide which one is better for you: combined single limit or split limit. Instead, you have to answer that question yourself depending on your personal preferences and aversion to risk.
Some people prefer the “umbrella”-style coverage of combined single limit policies, which offer better protection against all circumstances.
Others find combined single limit policies to be too expensive and are okay with the higher risk of maintaining combined single limit policies.
It’s up to you to decide whether combined single limit (CSL) auto insurance or split limit car insurance is the right choice for you.