What Are Combined Single Limits (CSL)?
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A combined single limit insurance policy, commonly referred to with the acronym of CSL, is a form of insurance coverage in which there is a single dollar limit applicable to any combination of property damage liability and bodily injury claims. Combined single limits are distinct from split limit policies in that split limits have three unique dollar amounts applicable to each type of accident: per occurrence limit pertaining to property damage from the accident, per occurrence limit for injured persons, and the per person limit.
To illustrate how combined single limits work, let’s say that you want $200,000 of coverage. With $200,000 in CSL, you would be protected for both property damage and bodily injury up to $200,000, regardless of how much property damage there or how much bodily injury there was.
If you want $200,000 with a split limit policy, you might have $50,000 in property damage liability coverage and $150,000 in bodily injury liability coverage. If you get into an accident, your policy will only pay up to $50,000 to repair the other party’s vehicle and $150,000 for the other party’s medical bills. The rest you will be liable for out of pocket.
The Pros of Combined Single Limits
Consider a situation in which you are driving and smash directly into a new Porsche that was just driven off the lot. If you have a $50,000 property damage liability (PDL) limit, it will not cover the entire value of the loss. New Porsches sometimes cost over $100,000. If you only have $50,000 in coverage, you will need to pay the remainder out of pocket. This could result in lawsuits that will sometimes require you to sell off your valuable assets.
A combined single limit insurance policy limits liability insurance should such an event occur. CSLs do not have sub-limits like split limit liability policies do. Rather, the overarching policy limit is applicable to whatever needs to be covered. This is a straightforward approach to insurance coverage.
Because of the restrictions of traditional split limit policies, many people opt to purchase umbrella coverage, which provides additional protection on top of your auto insurance policy. Because of the extra protection granted by buying a combined single limit liability policy, umbrella coverage is usually unnecessary.
- Can protect your assets (like your house or business)
- Virtually eliminates the need for lawsuits following accidents
- Limits the need to purchase umbrella coverage or additional liability coverage
- More than adequate coverage for nearly all insurance claims
The Cons of Combined Single Limits
The downside of a combined single limit insurance policy is it is likely to be comparably expensive. Furthermore, let’s consider a CSL with a maximum coverage level of $300,000 versus a split coverage policy with 100/300/50. This split policy has $300,000 coverage for bodily injury along with $50,000 coverage for property damage liability. The total amount of coverage is $350,000, exceeding the $300,000 of coverage in the CSL policy. In this sense, the split limit policy certainly has some merit compared to the CSL policy. In fact, it might be possible to hike the property damage coverage for a minor cost.
- More expensive than single limit liability policies
- Does not necessarily offer more protection
- Does not make sense for somebody with few assets to protect
What About Umbrella Insurance Coverage as It Relates to Combined Single Limits?
Plenty of people have umbrella insurance policies. Umbrella coverage is suitable for those who own multiple automobiles. If you have such a policy, you must be aware of when it kicks in and begins paying out. Take a closer look at the umbrella’s underlying coverages portion to verify the details of the umbrella coverage. If the umbrella kicks in and begins paying at $100,000 per person, $50,000 for property damage, and $300,000 per accident, it does not make sense to pay additional money for a $300,000 CSL as the umbrella coverage is already in effect.
The moral of this story is you should take a close look at your auto insurance policy’s declarations section. Find out if the current limits require improvement. Furthermore, it is also in your interest to analyze your umbrella insurance policy, taking a close look at the section pertaining to underlying coverages. Once you review all the details of your insurance coverages, you might find you are paying portions of your automobile insurance two times over.
Are Combined Single Limits Worth the Premium?
In most cases, the answer to this question is a resounding “Yes!”. Combined single limits provide expanded protection for insured parties at a higher premium. However, the premium for a CSL policy is unlikely to be exorbitantly more than a split limit policy. As noted above, there is a chance your umbrella insurance policy already covers components included in a CSL policy. However, in most other situations, the small hike in monthly insurance premiums for a CSL policy is well worth it due to the greater level of protection.
When in doubt, consult with an unbiased insurance expert. An independent insurance aficionado without skin in the game will help you determine if a CSL policy is suitable for your unique needs. Even something as subtle as the number of drivers in their teens or under the age of 25 in your household will shape your decision regarding a CSL policy. Discuss the cars and drivers to be insured with your insurance advisor and you will be able to make a truly educated and financially prudent decision to determine which auto coverage structure is suitable for your unique situation.
Final Word on Combined Single Limits – Err on the Side of Caution
If you are still on the fence as to whether a combined single limit policy is optimal for your needs and finances, err on the side of caution with a CSL policy that provides considerable protection. We are living in an overly litigious society in which people jump at the opportunity to file personal injury lawsuits. Many such lawsuits are actually quick cash grabs cloaked in the form of formal litigation.
Combined single limit policies provide ample coverage for each type of loss. This is the combined coverage every driver desires yet many are unwilling to pay for. Opt for a CSL policy and you will hit the road in full confidence knowing if you get into an accident, you will have substantial insurance coverage applicable to offset the costs tied to property damage and bodily injury including causally related lost wages and medical costs. The alternative is to move forward with a comparably limited split limit policy that may or may not cover the entirety of the damages. Do yourself and your family a favor by paying slightly more for a CSL policy and the peace of mind you enjoy will prove truly invaluable.
The bottom line is it is better to have extensive insurance rather than too little insurance. If you make an honest mistake while driving or if someone on your policy makes a mistake while behind the wheel due to inexperience or a distraction, you will rest easy if you have a comparably expansive CSL policy in place.