SL Specialty Insurance is a full-service bond agency that offers a range of insurance and bond services to business owners. Their services include vehicle dealer insurance, which covers premises liability, dealer plate coverage, RV dealer coverage, and auto liability, among others. SL Specialty also provides vehicle rental insurance, with coast-to-coast coverage for vehicles and counter products such as RLI, SLI, PAC, and PPC. This article will focus on the auto insurance aspect of SL Specialty's offerings and how it compares to other insurance options in the market.
What You'll Learn
Split limit vs. combined single limit
When purchasing car insurance, vehicle owners in many states have the option of choosing between a split limit auto policy and a combined single limit auto policy. Both policies provide coverage for bodily injury and property damage liability.
A split limit policy covers damages caused in an accident up to a certain amount per person, per accident, and/or property damage. The limit is usually presented in a three-number format, such as 100/300/50 or 250,000/500,000/250,000. The first number represents the maximum bodily injury liability coverage per person, the second number is the maximum amount per accident, and the third number is the limit for property damage. In the first example, the policy provides $50,000 of bodily injury coverage per person, with a total of $100,000 for all injuries per accident, and a $25,000 limit for property damage.
On the other hand, a combined single limit (CSL) policy provides an aggregate total for all damages, without differentiating between bodily injury and property damage payouts. For instance, a CSL policy of $300,000 would cover all claims, whether for bodily injury or property damage, up to that amount. This means that if one person sustained bodily injury losses and medical bills totalling $250,000, and another person's vehicle was damaged to the tune of $50,000, the CSL policy would cover all the claims, as the total of $300,000 is within the policy limit.
The main difference between the two types of policies is that a split limit policy has multiple limitations, whereas a combined single limit policy offers more flexibility by allowing the entire coverage amount to be used for either bodily injury or property damage as needed.
There are advantages and disadvantages to each type of policy, and the best choice depends on individual needs and budget. It is important to carefully consider the specifics of each policy and seek guidance from a licensed agent to ensure adequate coverage.
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Bodily injury liability coverage
When it comes to auto insurance, bodily injury liability coverage is a critical component of any policy. This type of coverage comes into play when you are at fault for an accident and helps to pay for the injuries sustained by others involved. It is a standard feature of most auto insurance policies and is a requirement in many states.
The limits of bodily injury liability coverage are usually presented as two numbers, such as "100/300". The first number represents the maximum amount that your insurance will pay per person, while the second number indicates the total payout for all injuries in a single accident. For example, with a "100/300" policy, your insurance would cover up to $100,000 per person and a maximum of $300,000 for all injuries in a single accident.
It is important to note that bodily injury liability coverage does not include your own medical expenses or property damage. If you want protection for your own medical costs and vehicle repairs, you would need to consider additional coverages, such as medical payments coverage or collision insurance.
The amount of bodily injury liability coverage you need depends on your state's requirements and your personal financial situation. Most states have minimum requirements for this type of coverage, but it is recommended to have enough coverage to protect your assets in the event of a lawsuit. You may want to consider purchasing higher limits or even umbrella insurance to ensure adequate protection.
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Property damage liability coverage
When it comes to auto insurance, property damage liability coverage is an important component that offers financial protection in the event of an accident. This type of coverage is designed to pay for the repair or replacement of another person's property that has been damaged by your vehicle. It is often referred to as "PD" and is required by most states, with each state setting its own minimum coverage requirements.
The amount of property damage liability coverage you need can vary depending on several factors. It is recommended to consider the value of your home and other assets, the frequency of your travel in high-traffic areas, and the prevalence of expensive vehicles in your area. If you own a home or other valuable assets, increasing your coverage limits can provide added protection. Similarly, if you frequently drive in congested areas or live in a neighbourhood with high-end cars, you may want to opt for higher coverage limits to adequately protect yourself financially in the event of an accident.
It is important to remember that if the cost of damages exceeds your coverage limits, you will be responsible for the remaining amount. Therefore, carefully consider your specific needs and circumstances when choosing your property damage liability coverage limits. Additionally, you may want to explore the option of adding an umbrella insurance policy, which can provide additional coverage beyond your standard car insurance limits.
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When to choose CSL
A combined single limit (CSL) policy is a provision that combines all the limits of a car insurance policy into a single dollar amount that satisfies your state's minimum liability insurance coverage requirement. CSL policies are typically more flexible and have simpler claims processes, but they can be challenging to find and are more expensive than split-limit policies. So, when should you choose a CSL policy?
Firstly, CSL policies are a good option for those who have many financial assets. With a CSL policy, you can estimate the value of your assets and buy enough coverage to protect that amount. This is because there is no limit on what's payable per claim component; the single, dedicated amount for accident claims enables the insurance carrier to divide it as needed. For example, if an accident results in a large amount of property damage but very little bodily injury, the bulk of the coverage can be focused on the property damage claim.
Secondly, CSL policies are beneficial if you want to avoid the need for an umbrella policy. An umbrella policy is designed to protect you if you are held personally responsible for injury or property damage, and your auto insurance limits have been exceeded. As CSL policies typically have higher limits, you can eliminate the need for this extra coverage.
Thirdly, CSL policies are a good choice if you want a simpler claims process. With a CSL policy, there is no differentiation between bodily injury payouts per person, per accident, or property damage claims – all claims are paid out of the same combined limit. This makes it easier to understand how much you are covered for and how much you can claim.
Finally, CSL policies are a good option if you want flexibility in how your insurance coverage is applied. With a split limit policy, coverage is firmly set per bodily injury and damage category. With a CSL policy, you have the flexibility to apply a single coverage amount as it's needed.
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CSL and umbrella insurance
CSL, or Combined Single Limit, is a type of liability coverage that combines multiple limits into one shared limit. It is an alternative to split-limit policies, which have separate limits for different types of claims. In a CSL policy, there is a single maximum dollar amount that can be paid out for any bodily injury or property damage claims resulting from an accident. This means that, in the event of an accident, the single limit can be applied wherever needed to cover all valid claims, up to the stated amount.
For example, if you have a policy with a $500,000 CSL, that is the maximum your insurer would pay, whether the claims are for bodily injury to one person, bodily injuries to multiple people, or any combination of the two. This differs from a split-limit policy, which would typically provide a maximum amount for bodily injury per person, a separate maximum amount for bodily injury per accident, and a third maximum for property damage.
CSL policies are beneficial as they offer greater flexibility in claims payment, allowing the single bucket of money to be allocated wherever needed without artificial caps by claim type. They also offer the potential for higher payouts, as there is no limit on payouts for any specific claim category, and they can prevent underinsurance, as there is no per-claimant limit – the max payout can be applied in full to any single claim if needed.
However, one disadvantage of CSL is that premiums are generally higher than for equivalent split-limit policies, as you are paying for greater potential coverage. CSL may also not be the best fit for those with minimal assets and a tight budget, as a lower split-limit policy may be sufficient.
Umbrella insurance, or excess liability insurance, 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. Your auto policy is your first line of insurance coverage; if its limits are exceeded, your umbrella policy will kick in. Umbrella policies are usually affordable and are a good option for maximising coverage when the limits on your policy are not sufficient to protect you from financial loss when facing large liability claims.
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Frequently asked questions
A split limit auto insurance policy has three separate dollar amounts that apply to each accident: a per-person limit, a per-accident limit for all injured persons, and a per-accident limit for all property damage. On the other hand, a combined single limit policy simply states a single dollar limit that applies to any combination of bodily injury and property damage liability claims.
A combined single limit policy covers bodily injury and property damage liability claims. Bodily injury liability covers medical treatment and other expenses for people injured in an accident, while property damage liability covers the costs to repair property damaged by an accident.
One benefit of a combined single limit policy is its simplicity, making it easier to understand compared to a split limit policy. Additionally, a combined single limit policy can provide more flexibility in how the coverage limit is divided to satisfy a claim.