What Are Split Limit and Combined Single Limit Policies?
Your auto insurance policy may cover your liability using a split limit or a combined single limit. The type of limit you have determines how much your insurance company will cover if you’re responsible for bodily injury or property damage.
Insurance companies typically provide policyholders with the option to choose from different liability limit amounts. Insurance companies may offer split limit policies or combined single limit policies.
Combined single limit policies
A combined single limit policy has one liability limit for all injuries or damage sustained in an accident.
Here’s how it works:
You cause an accident that injures three people and damages the other vehicle.
| Bodily Injury to the Other Driver | +$50,000 |
| Bodily Injury to the Other Driver’s Passenger | +$30,000 |
| Bodily Injury to Your Passenger | +$110,000 |
| Property Damage to the Other Car | +$20,000 |
| Total Damages: | =$210,000 |
Your combined single limit policy has one limit for each accident: in this example, $250,000.
| Your Liability Limit | $250,000 |
| Total Damages | -$210,000 |
| Difference Your liability insurance would cover the damages without additional out of pocket expenses for you. |
=$40,000 |
Split limit policies
A split limit policy has a lower limit that applies to each person injured and a larger limit that applies to each accident.
Here’s how it works:
You cause an accident that injures three people and damages the other vehicle.
Under a split limit policy, up to three different liability limits could apply to this accident:
- A limit applied to each person injured: in this example, $100,000.
- A second limit applied per accident: $250,000.
- A third limit applied to property damage in each accident: $25,000.
| Bodily Injury to the Other Driver | +$50,000 |
| Bodily Injury to the Other Driver’s Passenger | +$30,000 |
| Bodily Injury to Your Passenger | +$110,000 |
| Property Damage to the Other Car | +$20,000 |
| Total Damages: | =$210,000 |
One person had $110,000 in bodily injury damages.
| Per-Person Liability Limit | $100,000 |
| Bodily Injury to Your Passenger | -$110,000 |
| Remainder You would be personally responsible for this amount |
=$10,000 |
With a split limit policy, it could seem like you have per-accident coverage for the full damages. However, your per-person limit could leave you with out of pocket costs.
| Coverage for Bodily Injury to the Other Driver | +$50,000 |
| Coverage for Bodily Injury to the Other Driver’s Passenger | +$30,000 |
| Coverage for Bodily Injury to Your Passenger | +$100,000 |
| Coverage for Property Damage to the Other Car | +$20,000 |
| Your insurer will pay: Your out of pocket cost: |
=$200,000
= $10,000 |
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