California Property & Casualty Broker-AgentCasualty InsuranceMedium
A California trucking company operating under a Commercial Auto Policy is involved in an accident. The policy has a Combined Single Limit (CSL) of $500,000. The accident results in $350,000 in bodily injury to multiple parties and $200,000 in property damage. How much will the policy pay for this accident?
- A$700,000
- B$500,000
- C$350,000
- D$550,000
Show answer & explanationAnswer & explanation
Correct answer: B. $500,000
A Combined Single Limit (CSL) policy has a single maximum amount that it will pay for all bodily injury and property damage resulting from one accident. In this case, the total damages are $350,000 (BI) + $200,000 (PD) = $550,000. Since the CSL is $500,000, the policy will pay up to its limit, which is $500,000.
Why the other options are wrong
- A. This amount is incorrect and exceeds the total damages.
- C. This only covers bodily injury, not the total loss.
- D. This is the total amount of damages, which exceeds the policy limit.
Combined Single Limit (CSL) Calculation
When calculating payouts under a Combined Single Limit (CSL) policy, the insurer will pay the lesser of the total proven damages or the stated CSL amount for all bodily injury and property damage from a single accident.
- The CSL is the absolute maximum paid per accident.
- Total damages from BI and PD are aggregated.
- If aggregated damages exceed CSL, the policy pays the CSL amount.
Memory trick: CSL: Compare Sum to Limit, Pay Lower!