Most auto insurance is written with "split limits" such as 250/100/50 meaning which would mean you get $250,000 of coverage for injury coverage total, $100,000 per person maximum and $50,000 for the property you've damaged. In other words if one single person is injured and has medical bills that add up to $125,000 they can only get a max of $100,000 even though the overall limit is still not exceeded. A combined single limit could be for example $500,000 which means all damages are covered under that one limit on a first come first served basis.
Combined single limit is essentially a pool of money from which liability claims are paid. For example, if someone with a policy that has a combined single limit is in an accident with multiple people and the individual with the combined single limit policy is at fault and pursued legally for damages, any damages rewarded are paid out of the total pool.
So, if the combined single limit is $500,000, then damages will be paid from this $500,000 pool and no damages rewarded above $500,000 will be covered by the policy.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
When a policy has a combined single limit, the company’s liability to settle a lawsuit is limited to an absolute amount regardless of how many people or vehicles are involved. The split limit approach is common and breaks down company liability to losses that come from personal injury to individual liability and cumulative liability. For example, the policy might defend you in a lawsuit and pay damages up to $100,000 per person in an accident while limiting recover to $300,000 for an accident. The policy will also limit recovery on damage to someone else’s’ car that is damaged by yours to $100,000. Beyond those limits, whether split or combined single limits, you are personally responsible for a loss.
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So, if the combined single limit is $500,000, then damages will be paid from this $500,000 pool and no damages rewarded above $500,000 will be covered by the policy.