Property & Casualty Insurance Exam (National Portion)Casualty InsuranceMedium
A client's auto policy has a Combined Single Limit (CSL) of $300,000 for bodily injury and property damage liability. The insured causes an accident where two people are injured, incurring $150,000 and $100,000 in bodily injury respectively, and $75,000 in property damage. How much will the policy pay in total for this accident?
- A$325,000
- B$250,000
- C$400,000
- D$300,000
Show answer & explanationAnswer & explanation
Correct answer: D. $300,000
A Combined Single Limit (CSL) means there is one total maximum amount the policy will pay for all bodily injury and property damage claims arising from a single accident. The total damages are $150,000 (BI) + $100,000 (BI) + $75,000 (PD) = $325,000. Since the CSL is $300,000, the policy will pay up to this maximum limit.
Why the other options are wrong
- A. This is the sum of all bodily injury and property damage claims, which exceeds the CSL.
- B. This is the sum of bodily injury claims only, ignoring property damage and the overall limit.
- C. This amount is arbitrary and exceeds both the CSL and the actual total damages.
Combined Single Limit (CSL)
A type of liability limit in auto insurance where one maximum dollar amount applies to all bodily injury and property damage claims resulting from a single accident, without separate limits for each person or type of damage.
- One single limit for all BI and PD.
- No per-person or per-type sub-limits.
- Offers more flexibility in payout distribution.
Memory trick: One big bucket for all the accident costs.