State Farm Auto Insurance Practice Test

What is the definition of Combined Single Limits (CSL) in auto insurance?

1. A single limit for property damage only

2. The most an insurer will pay for all injuries and damages in one accident

3. A limit that rises with the number of claims

4. A limit that applies only to bodily injuries

The correct answer is: The most an insurer will pay for all injuries and damages in one accident

Combined Single Limits (CSL) in auto insurance refers to the maximum amount that an insurer will pay for all liabilities arising from a single accident, encompassing both bodily injury and property damage. This means that the insured has a set total limit that applies to the combined costs of injuries, damages to property, and other related expenses resulting from the incident. This approach simplifies the coverage since the insured is not confined to separate limits for bodily injury and property damage. Instead, it provides flexibility; the total coverage can be allocated as needed between the various claims that arise from the accident. This characteristic is particularly advantageous in situations where multiple parties are injured or if extensive property damage occurs. In contrast, other options describe limits that do not encompass the comprehensive nature of CSL. For instance, a limit focusing solely on property damage or bodily injury fails to recognize the combination and flexibility intrinsic to CSL. Therefore, option B accurately captures the essence of Combined Single Limits in the context of auto insurance.