Insurance FAQ’s: What is the difference between split and combined insurance limits?

When it comes to your insurance, understanding the difference between split and combined limits is crucial. Split insurance limits refer to when coverage is divided into separate limits for different types of losses or damages. Combined insurance limits genreally combine all types of losses or damages into a single limit.

Our Managing Director Alice explains it like this:

“Split limit will allocate how your policy pays out if you are at fault for a claim for that specific damage type. If you have what is commonly referred to as 100/300/100 then you have split limits. These coverage limits would give you $100,000 for one person’s injuries with a maximum payment of $300,000 for all injuries included on the claim. The last “100” shows that you have $100,000 for any property damage you are found liable for. It is very important to review these limits, especially now as the cost to repair vehicles is so much higher than it was in the past. The policy you purchased 5 years ago may have been adequate coverage then, but now would not may not be enough to protect you if you are at fault for an accident now. If someone’s injuries are higher than the specific coverage amount, you are then personally responsible for the difference, even if you have money left over in another category.

Many carriers now offer a combined single limit. Instead of your liability coverage being earmarked for specific coverages, you instead have one amount that can be used for any damages you are found liable for. It is basically a bucket of money that is there to protect you. If you have a $300,000 combined single limit, then you will have $300,000 of coverage for any injuries or property damage you are found liable for.  You are then only personally responsible for damages once you have exceeded this combined limit.”

The choice between split and combined insurance limits depends on various factors such as your risk tolerance, budget, and specific insurance needs. Split limits offer more flexibility by allowing policyholders to allocate coverage amounts based on their priorities. For instance, if you prioritize protecting yourself against bodily injury claims, you can allocate a higher limit to that category.

Combined limits, on the other hand, provide a straightforward approach by offering a single limit for all types of losses. This can be beneficial for those who prefer simplicity and don’t want to worry about allocating separate limits for different coverages.

It’s important to carefully evaluate your insurance needs and consider the potential risks involved before deciding whether to opt for split or combined insurance limits. Consulting with an insurance professional can help you make an informed decision and ensure you have the right coverage for your specific circumstances.

Have more questions? Contact our team of experts here.

A little more about Holley Insurance…

Holley Insurance was founded in 2000, and retains a core base of loyal clients. We have locations in Roanoke, Rocky Mount, and Forest, VA. As an independent insurance agency, Holley Insurance represents a carefully selected group of financially strong, reputable insurance companies. Therefore, we are able to offer you the best coverage at the most competitive price. Holley Insurance was named “Top Insurance Broker in Southwest Virginia” by Virginia Living Magazine for 2021. If you’re interested in starting a quote online or having us take a look at your current policies, click here!

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