What type of liability policy allows limits to be applied to either bodily injury or property damage, or both?

What type of liability policy allows limits to be applied to either bodily injury or property damage, or both?

• A. Combined single limit
• B. Separate limit
• C. Aggregate limit
• D. Special property limit

Answer: (A)

The combined single limit policy is a type of liability insurance that allows for a single dollar amount to cover both bodily injury and property damage claims. This means that the insured has a total limit for all claims, which can be allocated as needed between bodily injury and property damage within that limit. For example, if a policy has a combined single limit of $500,000, it can cover one claim involving $300,000 for bodily injury and another for $200,000 for property damage. This flexibility in allocation is advantageous as it simplifies the claims process and offers the insured a more streamlined approach to managing potential liability. In contrast, separate limits would designate specific, distinct amounts for bodily injury and property damage, which does not provide the same flexibility found in a combined single limit policy. Aggregate limits refer to the maximum amount that an insurer will pay for all claims during a policy period, which is different from how combined single limits operate. Special property limits focus specifically on certain types of property and do not relate to bodily injury coverage at all.

The combined single limit policy is a type of liability insurance that allows for a single dollar amount to cover both bodily injury and property damage claims. This means that the insured has a total limit for all claims, which can be allocated as needed between bodily injury and property damage within that limit.

For example, if a policy has a combined single limit of $500,000, it can cover one claim involving $300,000 for bodily injury and another for $200,000 for property damage. This flexibility in allocation is advantageous as it simplifies the claims process and offers the insured a more streamlined approach to managing potential liability.

In contrast, separate limits would designate specific, distinct amounts for bodily injury and property damage, which does not provide the same flexibility found in a combined single limit policy. Aggregate limits refer to the maximum amount that an insurer will pay for all claims during a policy period, which is different from how combined single limits operate. Special property limits focus specifically on certain types of property and do not relate to bodily injury coverage at all.