What does "combined single limit" mean in auto insurance policies?

The term "combined single limit" in auto insurance policies refers to a single, total limit of liability coverage that encompasses both bodily injury and property damage claims. This means that the insured has a unified amount available to cover claims resulting from an accident, without needing to differentiate between the two types of coverage.

For instance, if an auto insurance policy has a combined single limit of $500,000, this entire amount is available to cover any combination of bodily injury claims and property damage claims resulting from an accident. The benefit of this approach is that it provides flexibility, allowing the insured to more easily allocate the coverage as the circumstances of the incident may require, rather than being constrained by separate limits for each category of claims.

This significantly simplifies the claims process and ensures that adequate coverage is available for both types of losses, as opposed to setting a separate limit for each that could easily be exhausted, leaving the insured vulnerable.