Your auto insurance policy offers coverage for liability, which can be provided through either a split limit or a combined single limit. The specific limit type determines the extent of coverage your insurer provides in the event that you caused bodily injury or property damage to third parties. A combined single limit policy applies a single liability limit to cover all injuries or damages resulting from an accident, while a split limit policy divides coverage into a lower limit for each injured person and a higher limit for each accident. A policy with a combined single limit, although less commonly known, may prove to be a cost-effective solution for raising available liability coverage level for one injury or damage.
Every state in America sets minimum requirements. They usually set these figures as Split Liability Limits like 25/50/25 which means $25,000 bodily injury for one person, $50,000 as a maximum coverage for all bodily injury claims and $25,000 for property damages.
Many states will allow motorists to buy Combined Single Liability Limit auto insurance and it may be acceptable to purchase a policy with one $75,000 maximum allowance, in the above example. This means that the payment is not divided any more and any one settlement for any component can be $75,000. In other words, a single injury or property damage claim can be as high as $75,000. Remember that they had $25,000 maximum amounts on a typical option. Combined Single Limit can be split in any way needed.
For example, you caused an accident and you have an injury claim of $30,000 and another for $10,000, plus a totaled car worth $40,000. The total claims against you are $80,000 and your maximum allowance is $75,000. You are short of $5,000 and you will need to pay this out of pocket. In a typical scenario you would have spent $20,000 out of pocket.
In the above example, it appears that you were better served with Combined Single Car Insurance Liability Limit. And this may hold in many cases because you have the advantage of not worrying which way it is divided.
The shortcomings are that Combined Single Limit Liability policies may not be available in your state and not every company offers them. You will need to search for companies that will offer and get quotes from them. They are more common in commercial vehicle insurance.
Also, it may be slightly more expensive on a plain price comparison. But, it may work out cheaper if you were to make sure you have the maximum limit available regardless of being responsible for one injury or damage or multiple injuries and damages.
However, if you are really struggling to afford even the basic coverage and you don’t have much money or assets to worry about you would be served with a typical minimum coverage, as they are most common and therefore cheaper.
As a general rule, buying a typical automobile insurance policy works out more affordable because there is more competition in that segment of the market. On the other hand, the more you look for a less known way of doing things the less sources would be available that this reduced competition could work against you. So, keep this in mind when you are looking for special arrangements and customized policies.