What Is The Difference Between “Split-Limit” Liability Car Coverage And “Single-Limit” Liability Car Coverage?

Split-limit coverage uses three numbers to specify the limits for:

1. bodily injury liability for each person

2. bodily injury liability for a single accident (regardless of how many people are involved)

3. property damage liability

The single-limit coverage gives one number that is the maximum coverage for bodily injury and property damage altogether – regardless of the number of people involved or amount of property damage.

Case Studies: Understanding Split-Limit and Single-Limit Liability Car Coverage

Case Study 1: Multi-Vehicle Collision

One rainy afternoon, Alice’s car skids on a wet road, causing a multi-vehicle collision. Two other drivers, Bob and Carol, sustain injuries due to the accident, and their vehicles are severely damaged. Both Bob and Carol file claims against Alice’s insurance company for medical expenses and car repairs.

Since Alice opted for split-limit coverage, her insurance policy will provide a maximum of $50,000 for bodily injury liability per person. Fortunately, Bob’s injuries amount to $40,000, and Carol’s medical expenses total $30,000. Alice’s policy adequately covers both injured parties.

However, when it comes to bodily injury liability for a single accident, Alice’s coverage is limited to $100,000. Since the total medical expenses of both Bob and Carol add up to $70,000, her policy only covers a portion of the costs, leaving her personally liable for the remaining $30,000. Moreover, the property damage liability coverage of $25,000 is not enough to cover the extensive repairs needed for Bob and Carol’s vehicles, and Alice will need to pay the excess out of pocket.

Case Study 2: High-Speed Collision

Ben has single-limit liability car coverage with a total coverage limit of $150,000, regardless of the number of people injured or property damage incurred. While driving at high speed, Ben loses control of his car and collides with a roadside barrier. The impact is severe, resulting in injuries to three pedestrians and significant damage to several parked vehicles.

Ben’s single-limit coverage proves advantageous in this situation. The policy will cover the bodily injury and property damage costs up to the maximum limit of $150,000, regardless of the number of individuals injured or the extent of property damage.

Fortunately, the medical expenses of the three injured pedestrians and the repair costs for the damaged vehicles do not exceed Ben’s coverage limit. As a result, Ben’s insurance policy fully covers the expenses, sparing him from additional financial burden.

Case Study 3: Rollover Accident

One evening, Chris’s car flips over due to a sudden tire blowout, causing a single-vehicle rollover accident. Chris sustains minor injuries, but the accident results in extensive damage to public property, including road signs and guardrails.

Since Chris opted for split-limit coverage, his policy will provide a maximum of $50,000 for his bodily injury liability. Thankfully, his medical expenses do not exceed this amount, and his insurance covers all medical costs.

However, the property damage liability coverage of $25,000 is insufficient to cover the extensive damage to public property. The repair costs for the road signs and guardrails amount to $35,000. Unfortunately, Chris’s insurance policy falls short, and he is personally responsible for covering the additional $10,000 to restore the damaged property.