• Split Limit & Single Limit Liability Insurance

    Limit liability is insurance jargon for how much an insurance company is required to pay out in the event of a car accident. Bodily injury and accidental death are two possible scenarios that will put the type of insurance you own to the test. Limit liability is essentially divided up into two types: single limit and split limit. The difference between the two is very important, especially if you are at fault in an auto accident and the other party has made an injury claim. Take a few minutes to educate yourself about the differences and decide for yourself which type of coverage is best for your situation.

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    Split Limit Liability

    Drivers, at minimum, are required to hold a state-determined amount of personal injury liability insurance and property damage insurance. In case you are at fault in an accident, personal injury insurance will cover the other person’s medical bills up to a limit, while the property damage portion covers the cost of car repair. A basic split limit insurance plan divides your coverage into three parts: property damage, personal injury per person, and personal injury per accident. The last part covers personal injury claims no matter how many people are injured.

    Split limit liability separates these three parts. For instance, you might hold $25,000 personal injury per person, $50,000 personal injury per accident and $20,000 property damage. What that means is that if you are to blame in an accident, your insurance will cover up to $25,000 worth of medical bills per person, up to a total of $50,000. It will also cover up to $20,000 in damage bills. Anything over those amounts is your personal responsibility. If the cost of any one claim exceeds your limit, it is up to you to pay it. So if there is $30,000 in damage to a car, you are out $10,000. Likewise, if two people are injured, each with bills totaling $50,000. That’s $100,000 total with $50,000 being your out-of-pocket expense.

    Single Limit Liability

    Single limit liability, on the other hand, combines all of the limits into one pool. The same type of coverage applies: personal injury per person, personal injury per accident and property damage. However, since there is no limit to any one of them by itself, as long as the total claim does not exceed the total coverage you own, your insurance will cover any combination of damages. The number you are concerned with is the aggregate limit liability–damages in total.

    Single vs. Split Limit

    Comparing the two types side by side, there are advantages to both. With split limit liability, you can be stuck with a huge bill because the insurance you have left over for property damage cannot be transferred over to cover personal injury and vice versa. Single limit pulls from one source of insurance, but it is also more expensive to purchase than split limit because the insurance company is exposing itself to aggregate liability. If an opposing attorney knows you have single limit, there is a temptation to increase the claim made on your insurance in the event of an accident.

    When looking into car insurance, consider all of your options. Single limit liability and split limit liability are two of the choices you have when it comes to personal injury and property damage coverage. The difference between them is sizable, so make sure you have a firm understanding before you make your purchase.