Paul Sanchez
In California, auto insurance is a legal requirement for all drivers and vehicle owners. This insurance serves as proof of financial responsibility in the event of injuries or damage caused to others. While the state mandates a minimum level of liability coverage, drivers can opt for additional protection through various policies, such as Combined Single Limit (CSL) or split limit liability insurance. CSL insurance simplifies the claims process by providing a single dollar amount that covers all components of a claim, including bodily injury and property damage. On the other hand, split limit liability insurance has specific limits for each of its three coverage components: bodily injury per person, bodily injury per accident, and property damage. Ultimately, the choice between CSL and split limit insurance depends on individual needs and the specifics of any given accident.
| Characteristics | Values |
|---|---|
| What is a Combined Single Limit (CSL) Policy? | Auto insurance policies are typically broken up into two distinct types of coverage: one for damage to property and one for injury. CSL policies group all auto insurance liability coverage into one bucket. |
| What does CSL cover? | Bodily injury and property damage. |
| What are the benefits of CSL? | CSL policies can eliminate the need for an umbrella policy, are more flexible, and have simpler claims processes. |
| What are the drawbacks of CSL? | CSL policies are more expensive than split-limit policies. |
| CSL vs Split Limit | Split-limit policies divide liability coverage into three sections: bodily injury per person, bodily injury per accident, and property damage. |
| CSL in California | Not stated. |
What You'll Learn
California's Low Cost Automobile Insurance Program
Eligibility
To be eligible for the CLCA insurance program, you must meet the following criteria:
- Have a valid California driver's license
- Own a vehicle worth no more than $25,000
- Be at least 16 years old (applicants under 18 must be legally emancipated)
- Meet income eligibility requirements (below 250% of the federal poverty level)
- Have a good driving record
Coverage
Base CLCA policies provide liability-only coverage with the following policy limits:
- $10,000 of bodily injury or death liability per person
- $20,000 of bodily injury or death liability per accident
- $3,000 property damage liability per accident
CLCA policyholders can also add the following coverages to their policies for an added cost of around $43 to $82 per year:
- $1,000 of medical payments coverage per person
- $10,000 of uninsured motorist bodily injury per person
- $20,000 of uninsured motorist bodily injury per accident
Cost
The cost of the CLCA insurance program ranges from $198 to $802 per year, with the option to pay in installments. The base price varies depending on the county, age, and driving experience of the driver. Teen drivers between 16 and 18 pay double the base price, while drivers between 19 and 24 see a 30% surcharge on their base rates. Adult drivers who have held a license for less than three years will pay 40% more than their county's base price.
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Split Limit Liability Insurance
In California, it is mandatory to have auto liability insurance to comply with the financial responsibility laws in the state Vehicle Code. The most common way to do this is to buy auto liability coverage. Split Limit Liability Insurance is the most commonly used form of liability coverage.
- Bodily injury liability for each auto accident victim
- Bodily injury liability for each car accident
- Property damage liability
For example, on a typical auto policy, split limit liability may be specified as 250,000/500,000/250,000. In this case, the insurer will pay up to $250,000 to cover medical costs for any single person injured in an accident, with a maximum of $500,000 for all individuals injured in the accident. The third component in the above example has a $250,000 coverage limit, which will cover property damage.
Split limit policies tend to have lower premiums because they offer narrower insurance coverage. If the coverage under a split limit policy isn't enough, insured parties may consider combined single limit (CSL) or umbrella liability policies.
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Combined Single Limit (CSL) Liability Insurance
In many states, vehicle owners who purchase car insurance have the option of choosing between a split limit auto policy and a combined single limit (CSL) auto policy. CSL liability insurance combines all the limits of a car insurance policy into a single dollar amount that satisfies the state's minimum liability insurance coverage requirement.
A CSL policy has an overall auto coverage limit and doesn’t have separate maximum coverages for injury per individual, injury per accident, or property damage per accident. If you have such a policy and are involved in an at-fault auto accident, your insurance coverage will pay up to a specified amount. For example, a $500,000 CSL car insurance policy would cover an at-fault accident resulting in bodily injury and treatment costs of $400,000.
The advantage of having a CSL policy is that it eliminates the need for an umbrella policy because the limits are typically higher. An umbrella or excess liability policy is designed to protect you if you are held personally responsible to another person for injury or property damage and your auto insurance limits have been exceeded. CSL policies tend to be more flexible and have simpler claims processes, but they are also more expensive and can be challenging to find for personal auto insurance policies.
California law requires drivers to establish financial responsibility and carry evidence of this in their vehicle at all times. Most people show financial responsibility by buying auto liability insurance, but there are other ways to do so besides purchasing insurance.
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Umbrella Liability Policies
Umbrella insurance is extra liability insurance that goes beyond the limits of your existing policies. It provides an additional layer of security to those who are at risk of being sued for damages to other people's property or injuries caused to others in an accident. It also protects against libel, slander, false imprisonment, and invasion of privacy.
Umbrella insurance is often referred to as excess liability insurance. If you are sued for damages that exceed the liability limits of your car insurance, homeowners insurance, or other coverage types, an umbrella policy helps pay what you owe. In other words, if the dollar limit of the original policy has been exhausted, the umbrella policy acts as a fail-safe, so you don't have to dip into your savings and other assets.
Umbrella insurance may also provide coverage not included in a basic insurance policy. For example, umbrella insurance may pay for legal fees and damages if someone accuses you of slander (a false spoken statement) or libel (a false written statement). A typical homeowners insurance policy doesn't offer this coverage.
Umbrella insurance is especially useful for high-net-worth individuals who own a significant amount of assets and are at risk of being sued. Small businesses may also use an umbrella insurance policy to guard against potential monetary damages arising from claims.
The added coverage provided by an umbrella policy is also beneficial for individuals who possess considerable assets or potentially hazardous items, or who engage in activities that could increase their risk of being sued. This includes people who own dangerous items that can cause injury, such as swimming pools, trampolines, or dogs, as well as those who coach kids' sports, serve on the board of a nonprofit, or participate in sports where they could easily injure others (e.g., skiing, surfing, or hunting).
The cost of an umbrella policy depends on factors such as your location, the number and types of vehicles you own, and whether you own multiple houses. The policy is typically sold in million-dollar increments, with the cheapest option providing $1 million in coverage.
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Collision and Comprehensive Coverage
Collision Coverage
Collision coverage is an auto insurance provision that covers damage to your vehicle in the event of a collision with another vehicle or object. This may include repairs or a full replacement of your covered vehicle. For example, if you swerve to miss a dog and hit a fence, or another vehicle hits your car, collision coverage will apply.
Comprehensive Coverage
Comprehensive coverage, on the other hand, pays for damage to your vehicle caused by events other than collisions. This includes damage from theft, vandalism, fire, natural disasters, or falling objects. For instance, if an animal hits your car or your car is damaged due to a hailstorm, comprehensive coverage will apply.
Choosing the Right Coverage
Whether you need collision, comprehensive, or both types of coverage depends on several factors. Consider the value of your car, the amount of driving you do (especially in high-traffic areas), and the location where you live or frequently drive. If your car is worth more, you drive frequently, or live in an area with hazardous road conditions, comprehensive and collision coverage is highly recommended.
In California, auto insurance is mandatory, and drivers must be able to establish financial responsibility in the event of an accident. The state has a Low-Cost Automobile Insurance Program for eligible low-income drivers who may have difficulty affording standard coverage.
Combined Single Limit (CSL) and Split Limit Liability Insurance
When it comes to liability insurance, there are two main types: Combined Single Limit (CSL) and Split Limit. CSL provides a single overall limit for all components of a claim (bodily injury per person and per accident, and property damage). In contrast, split limit liability insurance has specific limits for each of these three components.
Both CSL and split limit liability insurance can be applied to auto insurance policies, depending on the state and the insurer. CSL policies tend to have higher premiums due to the broader coverage they offer.
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Frequently asked questions
A combined single limit, or CSL, insurance policy groups all auto insurance liability coverage into one bucket that simplifies payouts.
A split-limit policy divides liability coverage into three sections: bodily injury per person, bodily injury per accident, and property damage. A CSL policy, on the other hand, combines bodily injury and property damage liability into a single limit.
The advantage of a CSL policy is that it eliminates the need for an umbrella policy due to its higher limits. CSL policies also tend to be more flexible and have simpler claims processes.
CSL policies are typically more expensive than split-limit policies and can be challenging to find for personal auto insurance. Additionally, claims resolutions can take longer as insurance companies often need all parties to submit their claims before settling.
It depends on your state's minimum liability insurance coverage requirements. Each state has its own minimum split-limit amounts, which you can add up to calculate the required CSL coverage.
