What is Auto Insurance Combined Single Limit Policy?
A liability policy may or may not be combined. Combined single limit policy is when liability coverage can be combined into one lump sum or it can be separated and split into different incidents. Combined Single Limits are mostly purchased by organization, but they are sometimes offered for private cars as well. The benefits of having these types of policies depend on the amount of coverage and type of accident.
The most common car insurance policy is the split liability. It is mostly used for personal coverage. If an insurance policy states that the liability is 50/100/40 then this represents a split liability. There are states that will require liability coverage. Just because this has been stated by the state, it doesn’t mean a driver can not purchase combined single limits. The only limitation is that it should be greater than or equal to the state’s minimum requirement.
In a split liability, three amounts are always shown. The amounts specified are the maximum limits, and they are paid out to the other parties if you are at fault. The first amount is for bodily injury for a person, second amount is for bodily injury for a group of people who have been injured, the last amount is for property damages. Bodily injury may also include death, in car insurance policies.
The difference in the payout amount for a single person and group of people is that it is just double of the coverage. For example, the coverage is 50/100/40; the first amount represents $50,000 which we will be given to a single person. The second amount represents $100,000 which will be given to the group of people. The third amount is allotted to pay off damages that might happen to your personal property or another person’s property.
A combined single limit is an alternative to split liability coverage. In a combined single limit, coverage is combined into one liability insurance. The payout used for combined single limit may be used for bodily injury for one person, or bodily injury for multiple persons or property damages.
Just like in split liability, payout is not given to the combined single limits holder. Payouts are provided to those who are injured and incurred damages caused by the at fault driver. The only difference between a split and combined liability is the breakdown of claims. Unlike in split liability where the total amount is divided into three parts, in combined single limit the amount is one large amount that can be used whenever needed.
Example is when the driver at fault crashed into another car, and causes bodily injury. The insurance company will be obliged to payout the coverage limits. Assigning amounts to bodily injury and property damaged is not recognized. If the combined single limit policy has $100,000 then that is the total amount the insurance company needs to pay.
Since payout is discussed at the time of the accident, it is hard to decide which policy will be more beneficial. Both policies have potential benefits over the other.
The best thing to do in studying your options would be to consider all angles and make a knowledgeable decision on which type of insurance suits you best.