Connect
To Top

Understanding How Split Limits Work in Auto Insurance Policies

Car Insurance

When it comes to auto insurance, understanding how coverage limits work is essential for making informed financial choices. One important concept is split limits, a type of liability coverage that assigns separate maximum payouts for different aspects of a claim.

This approach is commonly found in car insurance policies and helps define how much an insurer will pay for bodily injury and property damage in an accident.

How Split Limits Work

Split limit policies divide coverage into three key categories:

1. Bodily injury per person – The maximum amount the insurer will pay for one individual’s medical expenses resulting from an accident.
2. Bodily injury per accident – The total amount the insurer will pay for all injured parties in a single accident.
3. Property damage per accident – The maximum coverage for damage to property, including vehicles, fences, or other structures, caused by an accident.

The woman crashed into the car.

Freepik | prostooleh | Split limits set clear caps on injury and damage payments so drivers know exactly how coverage applies after an accident.

These limits are often represented by a series of numbers, such as 100/300/50.

In this example, the policy would pay up to $100,000 for bodily injury per person, $300,000 total per accident, and $50,000 for property damage. If one person seeks $250,000 for injuries, the policy only covers $100,000, unless multiple people are injured and the total claims do not exceed $300,000.

Split limit policies usually have lower premiums since they offer narrower coverage, making them a cost-effective option for many drivers. However, this narrower coverage can leave gaps in larger claims, which is important to consider.

Split Limit vs. Combined Single Limit Policies

For broader protection, some drivers opt for combined single limit (CSL) policies. Unlike split limits, CSL policies place a single maximum dollar amount for all claim components.

For instance, a $300,000 CSL policy covers any combination of injuries and property damage up to $300,000. Whether one person claims $300,000 in medical costs or three individuals each claim $100,000, the total payout does not exceed the single limit. This type of policy reduces the risk of coverage gaps but usually comes with higher premiums.

Choosing between split limits and CSL policies involves evaluating potential risks and exposed assets. Some states protect certain assets, like retirement accounts, while others may allow homes to be used for liability judgments.

Consulting with a professional can help align coverage with personal financial protection.

The Role of Umbrella Liability Insurance

Freepik | Choosing higher coverage limits helps drivers protect savings and feel more secure on the road.

Even with split limit or CSL policies, coverage may not fully protect against large claims. Umbrella liability insurance provides extra protection once standard policy limits are reached.

For example, if a driver is liable for a five-car accident totaling $2 million in damages, a $300,000 auto policy—split limit or CSL—won’t cover the full cost. In such cases, an umbrella policy extends coverage and helps prevent financial strain from significant claims.

Assessing Coverage Choices

Split limits offer defined amounts for bodily injury per person, bodily injury per accident, and property damage. They are often more affordable but may not fully cover large claims. CSL policies offer a single coverage amount for all claim components, giving broader protection. Supplementing with umbrella insurance provides an additional layer of security for high-cost incidents.

Choosing between these options requires balancing premiums, coverage limits, and potential exposure. Understanding how split limits operate can help drivers select coverage that aligns with their financial situation and risk tolerance.

More inCar Insurance

Related Items

You must be logged in to post a comment Login