In a policy with split limits, which type of claims are affected?

In a policy with split limits, different types of losses that occur from any one incident are distinctly covered, maximizing the specificity and financial protection provided by the insurance policy. Split limits refer to specific dollar amounts that the insurer will pay for various aspects of liability during an incident, such as bodily injury per person, bodily injury per accident, and property damage. Each limit addresses a different part of the potential liability—we can consider bodily injury and property damage separately. This means that if multiple types of claims arise from a single event, each type is subject to its own limit, thus affecting claims that might result from that one occurrence in distinct ways.

For instance, if an accident results in both bodily injury to a third party and damage to their property, both claims will be evaluated under the respective split limits of the policy. The person injured may claim one amount under the bodily injury limit, while any damage caused to property would be evaluated under a different limit. This approach protects the insurer by delineating the maximum potential liability while providing policyholders a clear understanding of their coverage boundaries.