Updated June 15, 2022
If you’re in the market for auto insurance coverage, you’re probably hearing a lot of talk about split limit liability insurance and single limit liability coverage. Both can be viable options for drivers, but it’s important to understand the difference. Use our guide to split limit coverage to figure out which is best for you.
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A split limit refers to the dollar amounts your auto insurance company will pay out for different parts of a liability claim.
The policy cover three types of claims: bodily injury per person, bodily injury per accident, and property damage per accident.
Premiums can be lower with a split limit auto insurance policy because the coverage is lower.
What is a split limit insurance policy?
What does split limit mean?
A split limit refers to the maximum amount an insurer will pay out for different elements of a car insurance claim.
Buying a split limit automobile insurance policy is all about understanding liability. Every state mandates a different amount of liability coverage, but as long as you meet the minimum requirement, you can choose how much liability coverage or what type of coverage you buy.
Split limit insurance (and its counterpart, single limit insurance) are both about the total amount your insurer will pay toward personal injury and property damage claims after you’re involved in an at-fault accident. A split limit policy breaks out that total amount into three areas of liability: bodily injury per person and per accident, plus property damage per accident.
Understanding Each Type of Liability
A standard split limit policy covers three types of liability:
Bodily injury liability per person pays up to a certain amount to each of the injured persons who were hurt in an accident you caused.
Bodily injury liability per accident is the maximum the policyholder’s insurance company will pay to everyone hurt in an auto accident.
Property damage liability per accident covers property damaged in the accident, such as other people’s vehicles.
Split limit liability coverage is often broken down as a 100/300/50 split. That means $100,000 for injury claims per person, $300,000 for bodily injury coverage for the entire accident, and $50,000 for property damage.
What happens if one person has injuries that exceed the maximum amount for injury claims per person? The policy will only pay out up to the per-person limit, even if no one else was hurt in the accident. The policy will only pay out the maximum for injuries if three people each have $100,000 in medical claims.
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Split Limit vs. Combined Single Limit
The opposite of a split limit policy is a combined single limit (CSL) policy. A CSL policy limits the potential payout for all parts of a claim to one single dollar amount—for example, $300,000. That amount of coverage could go to $300,000 in medical bills for one person, $100,000 each for three people, or smaller amounts for even more.
Why do this? It can eliminate confusion after an accident and protect you in cases where things like medical expenses exceed the limits of a standard split limit policy. It can also eliminate the need for an umbrella policy, but it’s smart to compare the two since a single limit policy can be more expensive.
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Combined Single Limit vs. Umbrella Insurance
If you’re torn between a combined single limit policy and umbrella insurance, start by considering which assets would be exposed if someone sues you after an accident. Consider having a professional evaluate your risk exposure and advise you on what type of insurance you need.
An umbrella liability policy is broader than both a split limit and a combined single limit policy. It’s extra liability insurance coverage that goes beyond your auto or homeowners insurance and provides you with extra security.
This could come in handy if you’re held liable for a very expensive accident involving multiple cars; even a standard $300,000 combined single limit policy would barely make a dent if your liability is in the millions.
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Make Sure You Have the Right Coverage
Choosing the right policy starts with understanding the differences between what’s out there. Split limit policies can be more affordable, but combined single limit policies may offer more protection.
Frequently Asked Questions
Combined single limit and umbrella policies offer more protection. Compare the limits for different types of liability to understand the differences.
The limits of your insurance policy should be located on the declarations page, which summarizes all the essential information about your policy.
Split limit liability policies can be purchased with high limits, which would provide more protection than a policy that just meets your state’s minimum requirements. Ask an insurance agent what the options for limits are.
Consider what your personal needs and financial obligations are. If you cause an accident and can’t fully compensate people for property damage and bodily injury, they can file a lawsuit against you, regardless of what kind of policy you have.
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Data scientists at Insurify analyzed over 40 million auto insurance rates across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page. The car insurance data includes coverage analysis and details on drivers' vehicles, driving records, and demographic information. With these insights, Insurify is able to offer drivers insight into how their car insurance premiums are priced by companies.