Even among experienced insurance personnel I find confusion reigns on the definition and application of the two types of Liability Limits.
I see insurance 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 unfounded, 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 i.e. CSL Limits of $50,000 or $100,000 apply to either Bodily Injury OR Property Damage.
In other words, the maximum the insurance company will pay for covered damages that have been deemed to have been caused by you, (your fault) is $50,000 or $100,000.
The loss can be all Bodily Injury or all Property Damage or any combination of the two, but the maximum amount covered is $50,000 or $100,000 depending on the amount of insurance coverage you decide to purchase.
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 claims.
So insider fans, hypothetically, which insurance would you rather have,
A. $50k CSL or B. Split Limits of $50k per person/$50k per accident/$50k Property Damage? My preference at the bottom
TIP: We recommend a minimum insurance limit of $50,000 Property Damage in case you knock heads with someone else’s brand new SUV.
My Preference: B because I would have $50K BI AND $50K PD, a maximum of $100,000 insurance protection against loss versus $50k to protect against all potential loss in example A.
If you are confused or unsure in any way about about how much exposure you are willing to assume, consult your personal financial or legal advisor. The information above is meant to be used for general educational purposes only.