What is a SINGLE LIMIT LIABILITY (CSL) in Auto Insurance?

5.06.2020
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Introduction

Single limit liabilities are the insurance policies that may have combined single limits. It states a single dollar limit that would apply to any combination of property damage liability, bodily limits as compared to split limits where separate dollar amount applicable to each accident that varies from per person, per occurrence of persons injured or property damage that is the result of an accident.

It is basically a provision of an insurance policy that would limit the coverage of all the elements of the insurance policy and claim it to be a single dollar amount. It has a maxim dollar that covers the combination of the above-mentioned situations. It can also be used to cover the claims for more than one person in an accident.

For instance, if the policy says that the insurance company would pay up to “X” amount of dollars for a single claim regardless of whether all the claims are made combined or as a single entity. The combined single limit is basically the maximum amount of money the insurance company will pay in case the insuree claims the money.

How does this work?

It is also called the single limit policy that is frequently used with automobile insurance. It works in a way that there is a maximum amount of money that is paid out hat covers all the aspects of any damage (bodily or property damage). There is one thing to be noted here, that in this case, everyone involved in the accident would be covered and the amount will be split among the parties involved.

For example, two cars crash and there are four people involved in the accident and after all the calculations the upper limit of the insurance company was $2000. So, in this case, $500 will be the maximum limit that would be given to all the four people involved.

Why prefer CSL?

CSL policies offer broader coverage and for that reason, they tend to have a higher premium range. In this way, this becomes an umbrella policy that will cover automobile and homeowner insurance in one place. That said, regardless of the type of limit on your insurance policy, an umbrella sounds like a good idea than a split coverage where different things come under different types of policies. So, in case of an expensive accident, all the parties involved are covered. As a result, it wouldn’t matter much if you are sued for $1 million and you have a split single limit coverage that covers only $300,000. In this way, choosing CSL can look like a costly affair in the beginning but it turns out to be quite cheaper considering the example quoted above.

Hence, people with significant risk assets will often want to carry an umbrella liability of insurance coverage. However, CSL eventually eliminates the need for additional coverage but at the cost of a single dollar amount limit. But this becomes a win-win for both insuree and insurer for they both make profits from this working out. For example, if an accident results in more damage to property than life, the insurance can be applied to property, and payouts can be made with ease.

What is Single Limit Liability?

Single limit liabilities are the insurance policies that may have combined single limits. It states a single dollar limit that would apply to any combination of property damage liability, bodily limits as compared to split limits where separate dollar amount applicable to each accident that varies from per person, per occurrence of persons injured or property damage that is the result of an accident.

How does this liability work?

It works in a way that there is a maximum amount of money that is paid out hat covers all the aspects of any damage (bodily or property damage). There is one thing to be noted here, that in this case, everyone involved in the accident would be covered and the amount will be split among the parties involved.

What is the benefit of CSL?

CSL policies offer broader coverage and for that reason, they tend to have a higher premium range. In this way, this becomes an umbrella policy that will cover automobile and homeowner insurance in one place. That said, regardless of the type of limit on your insurance policy, an umbrella sounds like a good idea than a split coverage where different things come under different types of policies.

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