Auto Liability: Split Limit or Combined Limit?

Your auto insurance company typically provides policyholders with the option to choose from different liability amounts, either using a split limit or a combined single limit. The type of limit you have determines how much your auto insurance company will cover if you are responsible for bodily injury or property damage. Here we look at the difference between split limit and combined single limit liability coverage and give an example how they both work in the case of an accident.

Split Limit Liability Coverage

Split limit coverage divides the coverage limits into three areas: one amount for bodily injury per person, one amount for bodily injury for the accident, and one amount for property damage from the accident. A common split limit is a 100/300/50 split. This explicitly means that there is $100,000 of medical bodily injury coverage per person, $300,000 of bodily injury coverage for the entire accident, and $50,000 limit for property damage. 

Combined Single Limit Liability Coverage
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Combined single limit has one liability limit for all injuries or property damage sustained in an accident. For instance, if you choose $300,000 of combined single limit coverage, you would be protected for both bodily injuries and property damage up to that $300,000 amount total in a single accident. There is no cap per person, per accident, and for property damage. The only cap is the $300,000 total in damages. 

How These Both Work

Suppose you cause an accident where total injury and damages total $225,000. Two people are injured with $155,000 of bodily injuries (one at $30,000 and the other at $125,000), and $70,000 in physical damages. If your policy carries a 100/300/50 split, you might not be covered fully. Here's why. The first injured person would be covered for $30,000, but the second injured person would only be covered for $100,000 since the first limit is per person. The full $125,000 would not be covered and you would be on the hook for the difference of $25,000. For the physical damage that totals $70,000, you would only be covered for $50,000. You would be on the hook for the difference of $20,000. The total amount that you would be personally liable for is $45,000 under the split limit policy.

In the event of that same accident, the combined single limit would cover everything and you would be fully protected. The entire cost of all of the injuries and damages combine together to make one single payout. 

Advantages and Disadvantages of Single Limit

In many cases, carrying a single limit coverage policy will result in limits that are more than adequate to cover any claims resulting from an accident. Split limits can result in a gap between actual claims and the coverage limits. This can result in a personal injury lawsuit against the policyholder in an attempt to recoup any unpaid expenses. Many people choose to purchase a personal umbrella policy to fill in the gaps. Single limit coverage though is more expensive than split limit. Those who want to spend less on auto insurance will find that split limit is less expensive. 

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