Property & Casualty Insurance Exam (National Portion)Casualty InsuranceMedium
A client's Personal Auto Policy (PAP) has a Combined Single Limit (CSL) of $300,000 for bodily injury and property damage. The insured causes an accident resulting in $200,000 in bodily injury to one person and $75,000 in property damage to two vehicles. How much will the policy pay for this single accident?
- A$275,000
- B$325,000
- C$300,000
- D$200,000
Show answer & explanationAnswer & explanation
Correct answer: A. $275,000
A Combined Single Limit (CSL) means there is one aggregate limit for all bodily injury and property damage claims arising from a single accident. The total damages are $200,000 (BI) + $75,000 (PD) = $275,000. Since this total is less than the CSL of $300,000, the policy will pay the full $275,000.
Why the other options are wrong
- B. Incorrect; this exceeds the CSL, and the damages are not this high.
- C. Incorrect; this is the maximum CSL, but the actual damages are less than this amount.
- D. Incorrect; this only accounts for bodily injury, not property damage.
Combined Single Limit (CSL)
A single dollar limit in an auto insurance policy that applies to the total amount of damages for bodily injury and property damage liability arising from one accident, without separate limits per person or per type of damage.
- One limit covers all bodily injury and property damage.
- No separate 'per person' or 'per accident' BI limits.
- No separate property damage limit.
Memory trick: CSL is like a 'universal budget' for an accident, covering all damage types under one big umbrella.