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 $1,000,000. The accident results in $700,000 in bodily injury claims to multiple parties and $400,000 in property damage claims. How much will the policy pay for this single accident?
- A$1,000,000
- B$400,000
- C$1,100,000
- D$700,000
Show answer & explanationAnswer & explanation
Correct answer: A. $1,000,000
A Combined Single Limit (CSL) policy has one stated limit that applies to all bodily injury and property damage claims arising from a single accident. Regardless of the breakdown between BI and PD, the policy will not pay more than the CSL amount. In this case, the total damages ($700,000 BI + $400,000 PD = $1,100,000) exceed the $1,000,000 CSL, so the policy will pay its maximum limit of $1,000,000.
Why the other options are wrong
- B. This is only the property damage portion of the damages, ignoring the bodily injury and the CSL.
- C. This is the total amount of damages ($700k BI + $400k PD = $1.1M), which exceeds the policy's CSL.
- D. This is only the bodily injury portion of the damages, ignoring the property damage and the CSL.
Combined Single Limit (CSL)
A single dollar limit that applies to the total of all bodily injury and property damage claims resulting from one accident.
- No separate limits for per person, per accident BI, or per accident PD.
- Provides flexibility, as the entire limit can be used for BI, PD, or a combination.
- Common in commercial auto policies.
Memory trick: CSL: One big pot for all the accident's woes!