There are two different types of liability you can purchase on your auto insurance policy and it is important to know the difference and which is the best fit for you.
Combined Single Limit Liability insurance is a set number that the insurance company will pay which includes liability and property damage coverage. This means that you can select a set amount of coverage with your Allied Insurance Agent at the time of the policy being set up, which in turn will protect you in the event of an at fault accident. An example of this would be if you chose to carry $300,000 of combined single limit coverage, you would be protected for both liability and property damage coverage up to that $300,000 amount total in a single accident, regardless of how much the property damage is, versus the liability payout. This is the simplest form of liability due to taking away the confusion that Split Limit Liability can provide.
Split Limit Liability is the most commonly used form of liability, but is broken up differently than Combined Single Limit coverage. There are three areas you need to be aware of when it comes to split limit coverage and they are bodily injury per person, bodily injury per accident and property damage coverage. All three can have individual coverage amounts based on the coverage options with the insurance company. An example of this would be if you chose 100/300/100 as your coverage limits. This means $100,000 per person in liability coverage, $300,000 of per accident for liability coverage and $100,000 of property damage coverage. With this type of liability, you cannot exceed any of the individual coverage amounts. So if you were to get in an at fault accident and these were your coverage’s limits, the insurance company would not pay out any more than $100,000 for any one individual, no more than $300,000 per accident (still not allowing any one individual to claim over $100,000 of coverage) and no more than $100,000 of property damage. As you can see, this is a bit more complicated than combined single limit, but a very effective form of coverage nonetheless.
With either type of liability, the insurance company will only pay out up to the limits on the policy, so anything above and beyond your limits is your responsibility. With that said, it is very important to know how much asset protection you need so that you can make sure you are choosing the proper amount of coverage.
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