When you’re a business owner or contractor in Frisco, TX, safeguarding your vehicles and employees with the right commercial auto insurance is crucial. But with so many options, understanding the differences between combined single limit and split limits on your policy can make all the difference in ensuring you’re adequately covered.
In this article, we’ll break down these two coverage types to increase your understanding of single limit and split limit coverage.
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What is Combined Single Limit Coverage?
When you hear the term “combined single limit coverage,” think of it as one unified pot of money available to cover all damages in an accident. Whether it’s bodily injury or property damage, a single limit policy provides a maximum dollar amount that your insurance will pay out in the event of a claim.
For example:
Imagine you have a $500,000 combined single limit coverage policy. If one of your company vehicles causes an accident, this amount could be used to pay for any combination of bodily injuries and property damage up to that $500,000. It’s simple, straightforward, and often preferred by business owners who want an easier way to manage risk.
What is Split Limit Coverage?
On the other hand, split limit coverage divides the total coverage into three separate limits, typically addressing:
- Bodily injury per person (e.g., $100,000)
- Bodily injury per accident (e.g., $300,000)
- Property damage per accident (e.g., $100,000)
These limits are the maximum amounts your policy will pay in each category, which can sometimes be more restrictive compared to combined single limit coverage.
For example:
If you have a split limit policy with $100,000/$300,000/$100,000 coverage and one of your drivers causes an accident where two people are injured and the total bodily injury claim is $400,000, your policy will only cover $300,000 of that bodily injury claim. The remaining $100,000 would be your responsibility.
ALSO READ: Commercial Auto Insurance 101 for Frisco Residents
Why Does This Matter in Frisco and Surrounding Areas?
Frisco, TX, and the surrounding areas like Plano, McKinney, and Allen, are known for rapid growth, bustling traffic, and a booming construction industry. With this growth comes increased traffic congestion and a higher risk of accidents, especially for businesses that rely on vehicle fleets.
The decision between combined single limit and split limit coverage isn’t just about preferences; it’s about understanding the environment your business operates in. For instance:
- Traffic: With Frisco being one of the fastest-growing cities in the U.S., traffic has become a significant concern. More vehicles on the road increase the likelihood of accidents, making comprehensive coverage vital.
- Weather: Texas weather can be unpredictable, with hailstorms and heavy rains causing accidents. Having the right coverage ensures that your business isn’t left vulnerable after a natural disaster.
- Population Density: As Frisco’s population continues to surge, so does the density on the roads. More people means a higher potential for accidents involving multiple parties, which might make a single limit coverage more appealing.
Misconceptions About Combined Single and Split Limit Coverage
One common misconception is that split limit coverage is always cheaper. While it can be less expensive on paper, the reality is that it could leave you underinsured in a serious accident, especially in high-traffic areas like Frisco.
Another misconception is that single limit coverage is only for large corporations. In reality, it’s a versatile option that many small to medium-sized businesses in Frisco choose because of its simplicity and comprehensive nature.
Pricing Differences
So, how do these coverage types stack up in terms of cost? Generally, single limit policies might have a higher premium, but they offer broader protection. Split limits can be tailored to lower your premium, but at the risk of out-of-pocket expenses if claims exceed one of the specified limits.
In Frisco, where the cost of living and doing business is on the rise, opting for a single limit policy might provide peace of mind and financial security, especially if your business operates multiple vehicles.
ALSO READ: How Much Is Commercial Auto Insurance in Frisco, TX?
The Agent’s Office: Your Partner in Choosing the Right Coverage
At The Agent’s Office, we understand the unique needs of businesses in Frisco and surrounding areas. With access to top-rated A+ carriers in Texas, we help you find the best commercial auto insurance policy tailored to your business. Whether you’re leaning towards combined single limit coverage or exploring split limits, your dedicated agent is here to guide you through the complexities of insurance, ensuring you make informed decisions that protect your assets and your peace of mind.
Conclusion
Choosing between single limit and split limit coverage for your commercial auto insurance policy is more than just a financial decision; it’s about protecting your business in the thriving and fast-paced environment of Frisco, TX. With the proper guidance and an understanding of the local factors at play, you can ensure that your business is well-covered against any eventuality on the road.
Let The Agent’s Office help you navigate these choices with confidence. Complete the form below to explore your options and secure the best coverage for your business.
