Split Limit Liability

Posted in Auto Insurance , Liability

January 15th, 2009

Split limit liability is an aspect of auto insurance coverage that is somewhat complicated and difficult to understand. In essence, split limit liability is the auto insurers way of containing and capping costs relating to bodily injury and damage to a car, spread out over the number of people involved in a serious accident. For example, the first part of a split limit liability coverage will create a damages limit for each insured person. That could be any amount, depending on the policy a driver has chosen to go with. So, the liability limit for bodily injury could be $100,000 per person. The second part of split limit liability refers to the limit placed on bodily injury damages to two or more people stemming from the same car accident. That means the insurance company has placed a limit on bodily injury damages regardless of the number of people involved. The third limit will apply to car damage, also referred to as property damage, resulting from the accident. Thats the amount of money that it will pay to the driver of the other automobile.

As an example, lets say theres an SUV driving down the road, driven by a man. Next to him in the passenger seat is his wife. They get into an accident with a hybrid sedan, which is carrying three passengers. The man driving the SUV is responsible for the accident. Out of the five people involved, three have injuries that need medical attention one woman broke her leg; another mans arm was broken; and a teenage girl has multiple broken ribs. With split limit liability, the insurance company will pay a grand total of $100,000 for all three injuries. If medical bills are more expensive than $100,000, the man driving the SUV will be responsible for the uncovered costs.

As with any question about the details of auto insurance coverage, be sure to ask your local auto insurance agent for advice and further clarification.