Even among people who work in insurance and know what the two types of Liability Limits are and how to use them, there is a lot of confusion. I see agents telling buyers to "Beware of Split Limits," as if we might need to wash our hands after buying.
I see agents telling buyers to "Beware of Split Limits," as if we might need to wash our hands after buying.
In reality, this fear tactic isn't based on anything. Either CSL or Split Limits could be the best choice, but it depends on how much the limits are, not just how they are used during a covered loss.
Combined Single Limits, or CSL Limits, are limits of $50,000 or $100,000 that apply to either property damage OR bodily injury. In other words, the insurance company will only pay up to $50,000 or $100,000 for covered damages that are thought to be your fault. The loss can be all Property Damage, all Bodily Injury, or a mix of the two. The most you'll be covered for is $50,000 or $100,000, depending on how much coverage you buy.
Split limits, such as $100,000 bodily injury per person, $300,000 bodily injury per accident, and $100,000 property damage, mean that the insurance company must pay up to $300,000 in bodily injury claims, depending on how many people are hurt and how bad their injuries are, and up to $100,000 in property damage claims.
So, if you're a fan of "Insider," which would you rather have,
A. CSL of $50,000 or B. Split Limits of $50,000 per person, $50,000 per accident, and $50,000 for damage to property? Putting my choice at the bottom
TIP: We recommend a minimum limit of $50,000 Property Damage in case you crash into someone's brand-new SUV.
My choice is B because I would have $50,000 in BI and $50,000 in PD, giving me a total of $100,000 to protect against loss instead of just $50,000 in example A.
If you don't know how much risk you're willing to take or aren't sure about it, you should talk to a financial or legal advisor. The information above should only be used for learning in general.
