What Is Combined Single Limit Insurance?

Insurance policies establish financial limits on how much an insurer will pay out for a covered claim. These limits define the maximum responsibility the insurance company assumes for damages or losses. The structure of these payout limits can vary significantly between policy types and providers. Understanding these structures helps policyholders know their potential financial exposure.

What is a Combined Single Limit?

A combined single limit (CSL) policy provides a single, overarching maximum amount an insurer will pay for all covered damages from one incident. This limit applies collectively to bodily injury, property damage, and sometimes other related coverages like medical payments. It does not break down the amount into separate sub-limits for each category or per individual involved. Essentially, it acts as a large pool of funds to cover the total costs of an accident.

When an accident occurs, total expenses for all injuries and property damage are drawn from this single limit. If total damages exceed the specified CSL amount, the policyholder becomes personally responsible for paying the difference. For example, if a policy has a CSL of $300,000 and an accident results in $200,000 of bodily injury and $150,000 of property damage, totaling $350,000, the insurer would pay the CSL of $300,000. The policyholder would then be liable for the remaining $50,000. This structure allows flexibility in how funds are allocated across different types of damages.

Combined Single Limit Versus Split Limits

In contrast to a combined single limit, split limits divide coverage into distinct maximum amounts for different damage categories. A common auto insurance split limit structure includes three separate numbers: one for bodily injury per person, a second for total bodily injury per accident, and a third for property damage per accident. For example, a policy might be listed as 100/300/50, meaning $100,000 for bodily injury per person, $300,000 total for bodily injury per accident, and $50,000 for property damage.

The key difference lies in how payouts are constrained. Consider an accident causing $150,000 in bodily injury to one person, $10,000 to another, and $30,000 in property damage, totaling $190,000. With a $200,000 CSL policy, the entire $190,000 would be covered, as the single limit applies flexibly across all damages.

However, with a 100/300/50 split limit policy for the same accident, the payout would differ significantly. The $150,000 bodily injury claim for the first person would exceed the $100,000 per-person limit, leaving the policyholder responsible for $50,000. The second person’s $10,000 bodily injury and the $30,000 property damage would be covered within their respective limits. In this scenario, the policy would pay $100,000 for the first person’s bodily injury, $10,000 for the second, and $30,000 for property damage, totaling $140,000. The policyholder would then pay the additional $50,000.

Common Applications of Combined Single Limit Coverage

Combined single limit coverage is often used in insurance policies where complex, high-cost claims are possible. This includes commercial auto insurance, especially for vehicles that can cause extensive damage or multiple injuries. The flexibility of a CSL ensures the entire policy limit is available to cover the full spectrum of damages, regardless of how costs are distributed between bodily injury and property damage.

Umbrella insurance policies also frequently employ a combined single limit structure. These policies provide an additional layer of liability coverage above the limits of other underlying policies, offering broad protection against significant financial losses from lawsuits. General liability policies for businesses may also feature CSLs to cover a wide range of potential third-party claims, from bodily injury to property damage, stemming from business operations.