Insurance coverage can get complicated. If you have valuable assets to cover, you’ll want to make sure you can find the balance between having adequate coverage and not paying too much. In addition, you may have specific requirements for the type of coverage you want. Let’s take a look at split limit insurance and how it works.
What is Split Limit Insurance?
Liability coverage often has a split limit. Liability insurance coverage is required by nearly all states and this type of coverage has minimums that vary by state also. While you are required to at least buy the minimum coverage as specified by your state, you also have the option to buy increased coverage and to determine what type of liability coverage you have.
Liability insurance is used to pay for personal injury and property damage from an accident that was your fault. You may see the liability coverage options shown as three separate numbers with slashes in between.
This indicates the maximum coverage limits for each of the three categories of liability:
- Bodily injury per person
- Bodily injury per accident
- Property damage per accident
As you can see, liability limits are broken down, or split, per person and per accident. There are limits to what each person involved in the accident can recoup, as well as a maximum amount for injuries for the accident as a whole. If property damage is involved, there is also a maximum per accident.
For example, you may see liability coverage that looks like this: 50/100/25. What this means is that you have split limit coverage with the following amounts:
- Bodily injury per person: $50,000
- Bodily injury per accident: $100,000
- Property damage per accident: $25,000
Split Limit Insurance vs. Single Limit Insurance
Also known as combined single limit insurance, single limit insurance sets one amount that will be used for either bodily injury or property damage coverage, as needed, if you are at fault for the accident. The limit reflects the most the insurance carrier will pay out for one accident.
In this case, if you instead had single limit insurance of $200,000 per accident the car insurance provider will cover costs for bodily injury and property damage resulting from a single accident in which you are at fault.
How to Decide Which Coverage is Best for You
When trying to balance your options to achieve adequate protection at an affordable rate, it can really help to shop around. By using the InsuranceWins form you can compare rates from well-known carriers and can even play around with split limits versus single limits. While coverage types var from company to company and from state to state, shopping around can give you the advantage when you want to save money.