What is single-limit liability in car insurance?

Single-limit liability in car insurance is when an insurer will pay up to one fixed amount for all property damage and bodily injury claims against the policy. For example, a single-limit policy with a limit of $300,000 would cover all valid property damage and bodily injury claims until the total amount reached $300,000. Single-limit liability differs from the more common split-limit liability, which has separate limits for bodily injury and property damage liability.

A split-limit liability policy might be written as 25,000/50,000/25,000. These three numbers refer to the limit per person, per accident, and for property damage respectively. Under this policy, bodily injury claims for one person’s injuries would be covered up to $25,000, bodily injury claims for one accident would be covered up to $50,000 regardless of the number of people with injuries, and total property damage claims would be covered up to $25,000.

Single-Limit vs. Split-Limit Liability

Though most policies are sold with split limits, single-limit policies are a newer option and can be purchased from some companies. Single-limit liability car insurance policies are often more expensive because a single limit provides additional coverage.

Single-limit liability also means that a policyholder is less likely to be sued for damages that are not covered by insurance, so drivers with more assets are especially likely to benefit from single-limit policies. But drivers with fewer assets who want to save on their insurance premium should probably purchase a policy with split limits.