Property & Casualty Insurance Exam (National Portion)Casualty InsuranceMedium
A client has a Personal Auto Policy (PAP) with a Combined Single Limit (CSL) of $300,000. The client causes an accident resulting in $150,000 in bodily injury to one person, $75,000 in bodily injury to a second person, and $100,000 in property damage. What is the maximum amount the policy will pay for this accident?
- A$300,000
- B$325,000
- C$350,000
- D$225,000
Show answer & explanationAnswer & explanation
Correct answer: A. $300,000
A Combined Single Limit (CSL) means there is one total limit for all bodily injury and property damage claims arising from a single accident. The total damages are $150,000 (BI) + $75,000 (BI) + $100,000 (PD) = $325,000. Since this exceeds the CSL of $300,000, the policy will pay its maximum limit of $300,000.
Why the other options are wrong
- B. This incorrectly sums the total damages without applying the CSL.
- C. This is an incorrect calculation of total damages or an arbitrary number.
- D. This only sums the bodily injury to the two people, ignoring property damage and the CSL.
Combined Single Limit (CSL)
A Combined Single Limit (CSL) in an auto insurance policy provides one single maximum dollar amount that the insurer will pay for all bodily injury and property damage liability arising from a single accident.
- One limit covers all BI and PD.
- No separate per-person or per-accident limits.
- Simplifies claims but can be exhausted quickly by severe claims.
Memory trick: CSL is ONE BIG BUCKET for ALL damages, BI and PD combined.