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📋 '''Split limit''' is a [[Definition:Liability insurance | liability insurance]] structure that breaks coverage into separate maximum payouts for different categories of loss within a single [[Definition:Insurance policy | policy]], rather than providing one combined amount for all damages. In [[Definition:Auto insurance | auto insurance]], the most familiar example is the three-way split expressed as bodily injury per person / bodily injury per accident / [[Definition:Property damage liability | property damage]] — such as 100/300/50 (in thousands). This approach gives [[Definition:Underwriting | underwriters]] granular control over exposure and allows [[Definition:Insurance carrier | carriers]] to price each component of risk independently.

🔍 Under a split-limit structure, each sub-limit acts as an independent ceiling. Consider a commercial auto policy with $250,000 per person, $500,000 per accident for [[Definition:Bodily injury | bodily injury]], and $100,000 for property damage. If a covered driver causes a multi-vehicle collision injuring three people, the insurer's bodily injury obligation to any one claimant tops out at $250,000, with total bodily injury payments for that single accident capped at $500,000 — regardless of how many people are injured. Property damage to vehicles and structures is handled separately under its own sub-limit. [[Definition:Claims adjuster | Claims adjusters]] must allocate losses across each bucket, and [[Definition:Policyholder | policyholders]] can face [[Definition:Coverage gap | coverage gaps]] when a severe loss exhausts one sub-limit even though another remains untouched.

⚖️ Contrasting split limits with a [[Definition:Combined single limit (CSL) | combined single limit]] highlights the trade-offs insurers and insureds negotiate. Split limits typically produce lower [[Definition:Premium | premiums]] because the insurer's maximum exposure is more tightly compartmentalized, but they offer less flexibility when a loss is heavily weighted toward one damage category. From a carrier's perspective, split limits simplify [[Definition:Reserving | reserving]] and [[Definition:Loss ratio (L/R) | loss-ratio]] projections because each sub-limit constrains volatility within defined boundaries. For [[Definition:Commercial lines | commercial lines]] buyers, understanding the interplay between sub-limits is essential to avoid [[Definition:Underinsurance | underinsurance]] — a reality that brokers routinely address during the [[Definition:Policy placement | placement]] process.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Combined single limit (CSL)]]
* [[Definition:Bodily injury]]
* [[Definition:Property damage liability]]
* [[Definition:Liability insurance]]
* [[Definition:Auto insurance]]
* [[Definition:Policy limit]]
{{Div col end}}

Definition:Split limit - Revision history

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