What is CSL?
CSL are two significant differences between Bodily Injury Liability coverage per occurrence and property damage.
Bodily Injury Liability – applies to bodily injury.
Property Damage Liability – applies to property damage.
With CSL, the amount of bodily injury that occurs during an accident that costs $50,000 is the maximum amount that is covered by the CSL amount. However, the amount of property damage that occurs during an accident that costs $50,000 is capped at $5,000.
CSL on Entire Damage, not per Accident
In order for the CSL on Entire Damage coverage to apply to your case, the amount that the total loss will exceed will require the case to be combined with any other accident insurance you might have.
What is the current status of CSL in the United States?
Sustained loss or loss of value of an automobile will result in an increase in the amount of insurance that is required by the insurance company that covers the said automobile. However, the insurance company can use its pre-set limit on the insurance coverage that it provides per automobile. The pre-set limit generally takes into account the total sum insured plus the depreciation of the vehicle. The amount that is needed to compensate for the loss of value of the automobile, can be a part of the minimum insurance that is required for the said automobile. Also, the insurance policy, in the United States, always provides an additional allowance of coverage that should help compensate for any loss or damage to the automobile caused by an accident.
How does this happen?
A motorist or cyclist may carry collision insurance, but at a given point in time, the policyholder may still be considering the purchase of additional insurance in the form of the following.
Property Damage Liability.
Bodily Injury Liability.
CSL acts as a measure that quantifies the risk of any loss or accident. If the limit for the two policies is identical in terms of the sum insured, then you can buy the higher of the two options. However, should the two limits not be equal, the insured must pick the higher of the two options.
What does the CSL calculation consist of?
When making the calculations, the insurer first looks at the facts of the accident to determine the details of the accident (collision damage).
Why do we need to change this?
An insurance company will quote your clients for a financial product that comprises the coverages mentioned above. For a health and life insurance policy, the provider would quote you for coverage, risk, and premium. For a car insurance policy, a provider would quote you for a payment amount, the portion of the premium, and the total liability of your client.
CSL is the number which tells us how much of the insurance premium will be consumed by the bodily injury and property damage coverage and coverage will only continue to exist if you submit another claim. For instance, let’s say your client got hurt when the car he was driving ran into a tree on the highway, and the driver and car (a total of $100,000) belonged to your client.
Research on the impact of CSL caps on drivers
In the 2010 Texas Department of Transportation study on the impact of CSL caps on crashes, CSL caps were shown to be effective at lowering crashes by 2%. The states in the study had not yet raised their caps, which is why the findings were better than with previously tested caps. (Texas and California were the only states in the study that had done so.)
In the Insurance Institute for Highway Safety’s 2012 study, researchers compared injury crash risk among the states with the 10 states that had raised their CSL limits from $10,000 to $50,000. In the study, 10 years of data were compared among the two groups.
Your motorists should always, always, always call for a CSL check on their insurance coverage every year to ensure that their coverage is still valid and still active. In case you have previously sold or traded your car, it is best to check to see if your coverage is still valid with your insurance company so that you do not get any surprises later on.