What is the purpose of the minimum combined limit in auto policies?

The purpose of the minimum combined limit in auto policies is to ensure adequate coverage for both bodily injury and property damage. By setting a minimum combined limit, insurance policies help guarantee that the insured has sufficient financial protection in case of an accident where they are liable for both physical injuries to others and damages to their property. This is crucial for ensuring that victims of an accident can receive the compensation they need for medical expenses, lost wages, and property repairs without leaving the insured vulnerable to significant out-of-pocket expenses.

While protecting the insurer's financial interests is important, the primary focus of the minimum combined limit is to provide a safety net for both the insured and the others involved in an accident. Similarly, determining the cost of premiums is related but not the main goal of the minimum limit. Limiting the liability of the insured is also not the main purpose, as the goal is to ensure that sufficient coverage is available for multiple types of claims, rather than capping the amount they would be liable for.