What does the limit of liability represent in a Split Limits liability policy?

The limit of liability in a Split Limits liability policy delineates the maximum amount the insurance company will pay for bodily injury and property damage claims that arise from a single accident. Specifically, in the context of a Split Limits policy, the limit for bodily injury is often separated into two components: the maximum payout for injury to a single person and the total cap for all individuals injured in that accident.

Therefore, choosing that the limit per person injured in an accident is correct because it directly refers to the individual cap on what can be claimed for damages suffered by each injured party. This understanding is crucial for policyholders as it helps them recognize the extent of their coverage in the unfortunate event of an accident, ensuring they are aware of the financial protection provided under their policy in relation to bodily injury claims.

In contrast, the maximum coverage for property damage only pertains only to damages inflicted on property and is not applicable to bodily injury limits, which is why it doesn't encapsulate the complete aspect of Split Limits. The total amount paid for all damages suggests a more generalized cap that isn't specific to individual claims, and the specific coverage provided under a single limit doesn't align with the Split Limits structure, which differentiates between various categories of coverage.