What do split limits refer to in an insurance policy?

Split limits in an insurance policy refer to the separation of liability coverage amounts into distinct categories for bodily injury and property damage. Typically, this format provides three different payout limits: one for bodily injury per person, another for total bodily injury per accident, and a third for property damage.

This structure allows insured individuals to have more specific coverage that addresses the various types of damages that could occur in an accident or incident. For example, with split limits, the insurance policy could specify that it will cover $50,000 for bodily injury to one individual, $100,000 total for bodily injury per accident, and $25,000 for property damage. This targeted approach helps ensure that the insured is adequately covered for varying injury and damage scenarios that might arise.

The other options do not accurately capture the concept of split limits. The total amount paid by the insurer for all claims each year reflects aggregate limits, while overall limits encompasses a more generalized coverage without distinguishing between types of claims. Additionally, focusing solely on property damage ignores the liability aspect related to bodily injury, which is crucial in defining split limits.