Split Limit Insurance Guide
The two common types of liability insurance are single and split limit. Single limit insurance provides coverage for bodily injury and property damage under a single maximum payout per incident. Split limit insurance provides coverage for the same two areas, but there is a separation between the two; one payout for bodily injury and another for property damage.
Understanding Split Limits Coverage
Here's an example that may be helpful in understanding split limit liability coverage. If you have a split limit liability policy with $20,000 of bodily injury coverage and $10,000 property damage coverage, the policy would only cover up to the $10,000 limit for property damage. It would never cover any more for property, even if the actual damage was higher than the maximum. In a like manner, if there were many injuries in the accident, your insurance would only cover up to $20,000 and no more.
Which is Best?
There is no real way to say which coverage would be the most beneficial to you. To take the big picture into account involves thinking about how much damage or injury could be sustained. A good starting point would be to have $50,000 coverage for bodily injury coverage. You could probably go as low as $10,000 for property damage though. You should keep in mind that if damages exceed your maximum limit, you will be responsible for paying the balance of damages out of pocket.
What Other Types of Coverage Do I Need?
You have a wide variety of choices when it comes to coverage. You can choose Split or Single Limit, or PIP (Personal Injury Protection). The PIP coverage is intended to cover any injuries that you might sustain in an accident. Whereas bodily injury is in place to cover people that you might injure. Keep in mind, too, that most states require a minimum insurance level and that the types and levels of insurance coverage can vary from state to state. An additional consideration may be to get Uninsured/Underinsured coverage since most states have nearly a 20% occurrence of people driving without adequate insurance.
Will My Coverage Pay Off a Totaled Car?
On a final note, you may want to look into gap insurance coverage. This type of coverage pays off a car that is damaged beyond repair. Though it is not required in any states, some car dealerships require it. Gap will pay the difference between your collision insurance coverage and the amount of money that you still owe on the car. This is especially important for owners of more expensive or newer cars. Gap coverage can give you the security of knowing that if your new car is wrecked, you won't be stuck paying for it after the fact.