Buying Insurance is something that all of us need to do, but understanding what we are buying can be challenging!  When it comes to Car Insurance, we get this question a lot. “What’s better a combined single limit of liability or split limits of liability?”  The answer is not so simple and really depends on the specifics of the accident.  Often the best way to explain an insurance concept is to use examples, so here are two to consider.  Yes, these are very much like those word problems in MATH! 

Example 1 – Loss of $375,000 to one injured person – what’s better Combined Single Limit (CSL) of $500,000 OR Split Limits of $250,000/$500,000/250,000?

• CSL – In this case, the $500,000 CSL is enough coverage and there is no shortfall because the $500,000 is enough coverage to pay the claim and there would be $125,000 of unused limit.
• WIth Split limits, $250,000 Boldily Injury Per Person, $500,000 Bodily Injury Per Accident, and $250,000 Property Damage, there would NOT be enough insurance to pay the claim because the limit per person is $250,000 leaving a shortfall of $125,000.

Example 2 – Loss of $250,000 to two people and $75,000 of property damage – what’s better Combined Single Limit (CSL) $500,000 OR Split Limits of $250,000/$500,000/$250,000?

• CSL – In this case, the $500,000 will not be enough to cover the loss.  Since the total combined loss is $575,000, there will be a shortfall of $75,000
• WIth Split limits, $250,000 Bodily Injury Per Person, $500,000 Bodily Injury Per Accident, and $250,000 Property Damage, there would be enough coverage!  $250,000 per person times two people equals $500,000 which is the per accident limit of liability.  There is still $250,000 of Property Damage coverage left to pay for the $75,000 of damage to the other vehicle(s).  There is no shortfall in this case.

Hopefully these examples explain how Split and Combined Limits work, and which is better really depends on the specifics of the accident.   Often the best solution for resolving concerns about whether or not you have enough coverage is to purchase and Umbrella policy.  Umbrella policies increase your limit and are relatively inexpensive!

We look forward to helping you with your Car Insurance.  Please call us at 510-895-4800 and talk to an SMD agent today!

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