Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Casualty InsuranceMedium
A Florida business has a Commercial Auto Policy (CAP) covering its fleet of delivery vans. One of their drivers is involved in an accident while making a delivery, causing $15,000 in damage to a customer's property and $5,000 in medical expenses for the customer due to minor injuries. The CAP has a combined single limit (CSL) of $30,000. How much will the policy pay for this accident?
- A$30,000
- B$25,000
- C$20,000
- D$15,000
Show answer & explanationAnswer & explanation
Correct answer: C. $20,000
A combined single limit (CSL) means that the policy will pay up to the stated limit for all damages (bodily injury and property damage) resulting from a single accident. In this case, the total damages are $15,000 (property damage) + $5,000 (medical expenses) = $20,000. Since this is less than the $30,000 CSL, the policy will pay the full $20,000.
Why the other options are wrong
- A. This is the maximum limit, but only the actual damages incurred, up to this limit, will be paid.
- B. This amount is incorrect based on the total damages.
- D. This only covers the property damage, ignoring the medical expenses.
Commercial Auto Combined Single Limit (CSL)
A single limit of liability that applies to the total of bodily injury and property damage expenses arising from any one accident, offering flexibility in how the funds are allocated.
- One limit for all losses per accident.
- Applies to bodily injury and property damage combined.
- Total payout cannot exceed the CSL.
Memory trick: CAP Limits: Combined or Split, know your numbers to avoid a fit!