What is CSL in Insurance? A Complete Guide to Combined Single Limits

If you’ve shopped for auto insurance, you may have come across the term “CSL” or combined single limits. But what exactly does CSL mean and how does it work?

CSL refers to a type of liability coverage that combines multiple limits into one shared limit. It’s an alternative to split limit policies that have separate limits for different types of claims.

In this comprehensive guide, we’ll explain everything you need to know about CSL insurance:

What is a Combined Single Limit (CSL)?

A combined single limit, or CSL, is a liability coverage limit that combines multiple categories into one overall limit.

With CSL policies, there is a single maximum dollar amount that can be paid out for any bodily injury or property damage claims resulting from an accident.

So if you have a policy with a $500,000 CSL, that’s the maximum your insurer would pay whether the claims are for:

• Bodily injury for one person
• Bodily injuries for multiple people
• Property damage
• Any combination of the above

The single limit can be applied wherever needed to cover all valid claims, up to the stated amount.

How CSL Insurance Works

CSL policies work by effectively pooling coverage limits into one shared bucket. Here are some examples to show how claims would be paid:

Example 1:

• You have a $500,000 CSL policy
• You cause an accident that injures two people
• Person A has $300,000 in medical bills
• Person B has $250,000 in medical bills
• Total claims are $550,000

Payment: The insurer will pay the $500,000 CSL limit, splitting it between Person A and Person B based on their respective claims.

Example 2:

• You have a $500,000 CSL policy
• You cause an accident that badly damages another vehicle
• The property damage claim is $400,000
• There are no bodily injury claims

Payment: The insurer will pay the $400,000 property damage claim out of the $500,000 CSL limit.

So in essence, CSL allows flexible usage of the maximum limit to cover any combination of injury and damage claims.

CSL vs Split Limits

CSL policies differ from split limit policies, which separate the coverage limits into distinct categories:

• Bodily injury per person
• Bodily injury per accident
• Property damage

For example, a split limit policy might provide:

• $100,000 bodily injury per person
• $300,000 bodily injury per accident
• $50,000 property damage

With split limits, each type of claim has a firm limit that can’t be exceeded. So in a major accident with multiple injured parties, the per person caps could easily be reached, limiting total payouts below the per accident limit.

The benefit of CSL is there is no per-claimant limit – the max payout can be applied in full to any single claim if needed.

Advantages of CSL Insurance Policies

Compared to split limits, CSL auto insurance policies have some key advantages:

1. Greater flexibility in claims payment

The single bucket of money can be allocated wherever needed, without artificial caps by claim type.

2. Potential for higher payouts

There is no limit on payouts for any specific claim category, so CSL allows higher per-person bodily injury payments.

3. Can prevent underinsurance

With split limits, it’s possible to be underinsured if multiple claims exceed the individual limits. CSL minimizes this risk.

4. May eliminate need for umbrella policy

Umbrella policies provide additional liability coverage above auto policy limits. But CSL may provide enough coverage that an umbrella isn’t needed.

5. Simple, single limit

You only have one limit to track, rather than separate amounts for bodily injury and property damage claims.

Disadvantages of CSL

The trade-off for the flexibility of CSL is that premiums are generally higher than equivalent split limit policies. You’re paying for greater potential coverage.

CSL also may not be the best fit for those with minimal assets and a tight budget. For some drivers, a lower split limit policy is sufficient.

Finally, claims resolution can take longer with CSL since companies often wait until all claims are submitted before settling to properly allocate the single limit.

Is CSL Better Than Split Limits?

There’s no definitively “better” option – it depends on your specific situation:

• If you have significant assets to protect, CSL is likely the better choice. The coverage flexibility is valuable.

• If you’re on a tight budget or have minimal assets, a split limit policy may make more sense to control costs.

• CSL is also better if you want streamlined, simplified coverage with no worrying about per-person vs. per-accident limits.

Consider your assets, budget, and appetite for risk. An insurance agent can help assess the pros and cons for your situation.

What CSL Limit Should You Get?

As with any auto policy, higher CSL limits are better to protect your assets in a serious accident. Common CSL limits are:

• $100,000 CSL
• $250,000 CSL
• $500,000 CSL
• $1,000,000 CSL

Evaluate your personal financial exposure – assets, income, and liability risks. An insurance professional can help recommend adequate CSL limits. Many advise $500,000 as a minimum.

Higher CSL limits do cost more, but may be warranted if you have considerable assets. Also consider adding umbrella insurance for further protection.

Adding CSL to Your Auto Policy

Want to change from split limits to CSL coverage? Contact your auto insurance agent.

Some key steps in switching:

• Review current liability limits and evaluate desired CSL amount.

• Understand how the CSL premium compares to your current split limit policy.

• Make any needed adjustments to deductibles or other coverages.

• Update your policy declarations page to CSL from split limits.

The process is fairly straightforward. An agent can explain the switch and ensure seamless policy transition.

The Bottom Line on CSL Insurance

Combined single limits offer flexibility by consolidating coverage limits into one shared bucket. This allows full use of the maximum payout for any accident claims.

CSL is best for those wanting robust, simplified liability protection. But it comes with increased cost. Carefully consider your budget and insurance needs when choosing between CSL and traditional split limits.