Property and Casualty Insurance Practice Exam

What is a characteristic of Split/Combined Single Limit coverage?

1. It offers separate limits for each type of damage

2. It provides a single combined limit for both bodily injury and property damage

3. It covers only property damage claims

4. It has no limitations on coverage

The correct answer is: It provides a single combined limit for both bodily injury and property damage

The characteristic of Split/Combined Single Limit coverage is that it provides a single combined limit for both bodily injury and property damage. This means that the policy has a maximum payout for all claims, regardless of whether they pertain to bodily injury or property damage. This type of coverage simplifies the claims process, as the insured does not need to navigate between different limits for different types of damage. Instead, they have a unified limit available, allowing for flexibility in how claims are handled. In contrast, separate limits for each type of damage would typically be indicative of a split limit policy, which does not provide the same level of flexibility. Coverage that only applies to property damage claims would not encompass bodily injury, thereby not fitting under this definition. Furthermore, having no limitations on coverage would contradict the nature of insurance policies, which usually impose certain restrictions and limits in order to manage risk effectively.