Reader’s Question:

I have been having thoughts on how to compare vehicle insurance from different insurance companies. I happen to chance upon some customers and agents conversing over combined single limit and split limit. They seemed to be very confused about the policy and they argued constantly over this topic. To find clarity, what do these two have in common or how do they differ? They both sound the same to me, though I do not know a thing about them.

Constance

Kenner, LA

I am glad you asked that question because many individuals have found their reserves dwindling because of excessive coverage due to the fact that unknowingly, they are taking more than what they need. In the old days, there is a saying about biting off more than you could chew. Now, many people find themselves in realization that they, too, are one step closer to pitfalls. Deciding over insurance coverage is not an easy task; it is a long term commitment, therefore, it is wise to compare vehicle insurance. Before you do so, you should look at your investments and most importantly your budget. Do not buy unnecessary coverage just because you are uncertain about the policy. You have to do your part by reading and inquiring about the vehicle insurance policy. If you are confused or uncertain about your policy, ask questions and verify the details with the help of an agent.

Now, going back to the question of choosing your limits, first thing to think of is your budget. Pick a policy or set limits that would be most affordable to you in accordance to your budget. Part of your job as a client is to know about the policy, setting limits, and to know how it fits your budget. However, deciding over combined single limit and split limit is sometimes a matter of choice and not a matter of price. Like for instance, many individuals choose safety/security over economy; this is one major factor when choosing their preferred policy. Nevertheless, you should weigh these factors considerably and carefully for this would have a long-term effect on your payments.

If you prefer economy, you could try purchasing a combined single limit. A combined single limit is a combination of liability for property damage and physical injury in one single limit. Many who prefer economy over security choose a combined single limit because it is more flexible in payment terms and this fits well into their budget. However, in an event when an injured party demands a higher claim, to an extent which exceeds your policy limits, you have to pay for it out of your own pocket.

On the other hand, if you prefer security over economy, a split limit may be well suited for your needs. A split limit has a split liability for property damage and bodily injury. However, this could mean more costs as you have a separate liability coverage for each one. But if you are protecting your investments and avoiding suits and claims, this may be perfect for your needs.