10. A liability policy has one policy limit that applies to both bodily injury and property damage losses. This is an example of a
Answer: A
A liability policy with one policy limit for both bodily injury and property damage is an example of a single limit policy.
A single limit policy provides a single maximum amount that covers both bodily injury and property damage claims, making it simpler and often more efficient in managing liability coverage.
A) single limit policy
This option is correct as it accurately describes a liability policy that has one policy limit applicable to both bodily injury and property damage losses. This type of policy simplifies the coverage by consolidating limits into one overall amount.
B) split limit policy
A split limit policy is incorrect because it involves separate limits for bodily injury and property damage, such as a policy that specifies different maximum payouts for each type of loss. This does not align with the description of having a single policy limit.
C) combo limit policy
This option is incorrect as it suggests a combination of limits for different coverages, which does not fit the scenario of a single limit applicable to both bodily injury and property damage. There is no standard insurance terminology that refers to a "combo limit policy" in this context.
D) contributory limit policy
A contributory limit policy is also incorrect because it implies a system where multiple policies contribute to a single claim limit, which does not pertain to the scenario described. This term is not widely recognized in liability coverage discussions.
Conclusion
The correct answer is a single limit policy because it effectively combines coverage into one limit for both bodily injury and property damage, simplifying the claims process. All other options incorrectly describe the structure of the policy limits, highlighting the importance of understanding different types of liability coverage in risk management.