What Are Split Limits and How Do They Affect Your Insurance Coverage?

Introduction

As an insurance advisor, I often come across clients who are confused betweensplit limitsand combined single limits when it comes to theirinsurance coverage. In this article, I will explain what split limits are and how they can affect your insurance coverage.

What are split limits?

Split limits are a type ofliability coveragethat is offered by insurance companies. They are called split limits because they are divided into three different parts:bodily injuryper person, bodily injury per accident, and property damage per accident.

How do split limits affect your insurance coverage?

Split limits can affect your insurance coverage in two ways: the amount of coverage you have and the cost of yourinsurance premium.

Coverage Amount:

When you have split limits, the amount of coverage you have for bodily injury and property damage is divided into three different parts. For example, if you have a split limit of $100,000/$300,000/$50,000, this means that your insurance policy will cover up to $100,000 for bodily injury per person, up to $300,000 for bodily injury per accident, and up to $50,000 for property damage per accident.

Cost of Insurance Premium:

The cost of your insurance premium will depend on the amount of coverage you have. In general, the higher the limits, the more expensive your insurance premium will be. However, it is important to remember that having higher limits can provide you with better protection and peace of mind.

Example of Split Limits

Let's say you have a split limit of $100,000/$300,000/$50,000. If you are involved in an accident and are found to be at fault, your insurance policy will cover up to $100,000 for bodily injury per person, up to $300,000 for bodily injury per accident, and up to $50,000 for property damage per accident. If the cost of the damages exceeds these limits, you will be responsible for paying the remaining amount out of pocket.

Conclusion

Split limits can be a great way to ensure that you have the right amount of coverage for your insurance needs. However, it is important to understand how they work and how they can affect your insurance premium. As an insurance advisor, I always recommend that my clients review their insurance policy and consider increasing their coverage limits to ensure they have adequate protection. Remember, it is better to be safe than sorry.

Insurance Tips

- Review your insurance policy annually to ensure that you have adequate coverage.

- Consider bundling your home and auto insurance policies to save money.

- Always read the fine print and ask questions before signing an insurance policy.

- Keep a record of your insurance policies and important contact information in a safe place.

- Don't be afraid to shop around and compare insurance quotes from different companies to find the best deal.