How Auto Limits Work For You

When it comes to purchasing auto insurance, there are multiple limits to choose from. The amount of coverage you have depends not only on the dollar amount selected, but the type of limit as well.

Here’s a breakdown of the different types of limits and how they work:

For liability and uninsured motorists coverages:

• Combined single limits (CSL) – One maximum dollar amount that applies to all injuries and property damage resulting from the same accident. This is different than split limits. 
• Split limits – Two or three sets of maximum dollar amounts where each amount applies specifically to injuries or property damaged in an accident. Here are two examples of split limits:

Liability limits: 250/500/50

-$250,000 is the maximum amount the insurance company will pay for each injured person 

-$500,000 is the maximum amount paid for all injured persons combined

-$50,000 is the maximum amount for property damaged 

Uninsured motorists limits: 100/300

-$100,000 is the maximum amount paid for each injured person

-$300,000 is the maximum amount paid for all injuries and damages resulting from the same accident

 For collision and comprehensive (other than collision) coverages:

• Actual cash value (ACV) – The amount your vehicle is worth at the time of an accident, which takes into consideration the depreciation or loss in value since you purchased the vehicle.
• Replacement cost – The amount to replace your vehicle with a vehicle of the similar type, without a deduction for depreciation. 
• Agreed value – The amount you and your insurance company agree on when you take out the policy for the value of your vehicle if it is totaled. Agreed value is often selected with customized, classic, or antique vehicles.
• Stated value – The maximum limit, not a guaranteed limit, which is based on the value you determine for your vehicle and is listed in the policy. Like agreed value, stated value is typically chosen for customized, classic, or antique vehicles.

Deductibles also affect the limit of insurance. Coverages like comprehensive, collision, and uninsured motorists property damage (UMPD) typically offer a choice of deductible amounts, which is the amount you agree to pay before your insurance company pays additional costs. For example, if it costs $2,500 to fix your car and you chose a $1,000 deductible, you would pay $1,000 and your insurance company would pay $1,500.

Keep these limits in mind when purchasing auto insurance and review the limits again when there are changes, like a new driver in the household, you sell or buy a car, or move. To find out which limits are on your auto policy, check your auto insurance ID card, look at your auto policy declarations page, or contact your professional insurance agent.