Insurance terminology can be convoluted and confusing. But when it comes to your auto insurance liability limits, it’s essential to understand these terms. Combined single limit (CSL) policies group all the coverage into one bucket rather than splitting it into two buckets for bodily injury vs. property damage.
Keep reading to learn the definition of CSL insurance and the differences between CSL policies and split-limit policies.
What is a combined single-limit policy?
A combined single limit policy, or CSL, is a provision that combines all the limits of a car insurance policy into a single dollar amount that satisfies your state’s minimum liability insurance coverage requirement.
When you have a combined single limit policy, it means your car insurance company combines bodily injury liability and property damage liability into a single limit. The insurance company would pay up to the stated limit for a third-party claim.
Why get a combined single limit (CSL) policy?
The advantage of having a combined single-limit policy is that it eliminates the need for an umbrella policy because the limits are typically higher.
An umbrella or excess liability policy is designed to protect you if you are held personally responsible to another person for injury or property damage and your auto insurance limits have been exceeded. Your auto policy is your first line of insurance coverage; if its limits are exceeded, your umbrella policy will kick in.
CSL policies typically are more flexible and have simpler claims processes, but they also can be challenging to find for personal auto insurance policies. But remember that these policies are more expensive than split-limit policies, so make sure you can afford the premium.
How much combined single-limit coverage do I need?
Each state has its own minimum amount of liability coverage. Add up the split limit amounts for each state’s combined single-limit coverage minimum — that total is how much insurance you must purchase in your state.
ExampleThe minimum split limits in Nevada for auto insurance are:
- $25,000 for bodily injury or death of one person in any one accident
- $50,000 for bodily injury or death of two or more persons in any one accident
- $20,000 for damage to or destruction of property of others in any one accident
You must purchase $95,000 in combined single-limit insurance coverage for a combined single-limit policy in Nevada.
Combined single limit vs. split limit
Most people have split-limit car insurance policies where the liability coverage is divided into three sections:
- Bodily injury per person
- Bodily injury per accident
- Property damage
So, if your split limit is 25/50/25 (representing coverage limits of $25,000 limit for bodily injuries per person, $50,000 limit for injuries per accident and $25,000 for property damage) and you’re in a car accident with $75K in bodily injury damages but only $25K in property damages, you’ll be on the hook for the additional $25K that’s beyond the $50K injury liability of your policy.
On the other hand, if you had a combined single limit policy with a limit of $100K, it would have covered the injuries and property damage as the payout can be divided as needed for the bodily injury and property damage claims.
Combined single-limit policies can be a good option for those who have many financial assets because you can estimate the value of your assets and buy enough coverage to protect precisely that amount.
Resources & Methodology
Source
Nevada DMV. “Nevada Insurance Requirements.” Accessed August 2022.
– Michelle Megna contributed to this story.
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