Stacking Auto Insurance: What It Means

Stacking auto insurance is an option in some states that lets you increase your uninsured motorist (UM) or underinsured motorist (UIM) coverage limits based on the number of vehicles you insure. This type of coverage is useful if you get into an accident with a driver who doesn't have insurance or doesn't have enough insurance to cover the costs of the accident. By stacking your coverage, you can combine the UM/UIM limits for each vehicle on your policy, effectively increasing the amount of coverage available to you. For example, if you have two vehicles with $50,000 in UM coverage each, stacking would give you a total of $100,000 in coverage. Stacking can be done within a single policy or across multiple policies, depending on the state and insurance provider. However, it's important to note that stacking may not be allowed in all states, and it may result in higher insurance premiums.

Characteristics of Stacked Auto Insurance

Stacking increases your UM/UIM coverage

Stacking your UM/UIM coverage can be a great way to increase your protection and peace of mind in the event of an accident with an uninsured or underinsured driver. Here's how it works and why you might consider it:

Stacking your auto insurance means combining, or "stacking," the coverage limits from multiple vehicles or policies to increase your overall coverage limit. This is especially useful for UM/UIM coverage, as it can provide greater protection against accidents involving uninsured or underinsured motorists.

Vertical stacking, or intrapolicy stacking, involves combining coverage limits for multiple vehicles insured under the same policy. For example, if you have two cars on the same policy with a UM limit of $40,000, you can stack the coverage to have a total limit of $80,000.

Horizontal stacking, or interpolicy stacking, allows you to combine coverage across multiple policies. For instance, if you and your spouse have separate policies for your vehicles, each with a UM limit of $30,000, you can stack the coverage to have a total limit of $60,000.

Benefits of Stacking UM/UIM Coverage

Stacking your UM/UIM coverage can provide several benefits:

• Higher Coverage Limits: Stacking increases your coverage limit, giving you greater financial protection in the event of an accident with an uninsured or underinsured driver. This can be crucial in covering medical expenses and other related costs.
• Protection Against Uninsured Motorists: According to estimates, about 12.6% of motorists in 2019 were driving without insurance. Stacking your UM/UIM coverage helps protect you financially if you're in an accident with one of these uninsured drivers.
• Peace of Mind: Stacking provides added peace of mind, especially if you live in a state with a high percentage of uninsured drivers. Knowing that you have sufficient coverage can reduce stress and worry.

Considerations

While stacking your UM/UIM coverage has its advantages, there are also a few things to consider:

• Increased Cost: Stacking your coverage typically leads to higher insurance premiums. The extra cost may be worth it for the added protection, but it's important to evaluate your budget and coverage needs.
• State and Insurer Restrictions: Not all states allow stacking, and some insurers may choose not to offer it. Be sure to check with your state laws and insurance provider to understand your options.
• Health Insurance Coverage: If you have a comprehensive health insurance policy with low out-of-pocket costs, you may not need to stack your UM/UIM coverage as much. However, if your health insurance has high deductibles or limited coverage for accidents, stacking can be beneficial.

In conclusion, stacking your UM/UIM coverage can provide significant benefits, especially if you have multiple vehicles or live in an area with a high percentage of uninsured drivers. It gives you added financial protection and peace of mind, knowing that you're covered in the event of an accident with an uninsured or underinsured motorist. However, it's important to weigh the increased cost and any restrictions that may apply.

Stacking is only an option in some states

Stacking auto insurance is an option in some states, but not all. This means that in certain states, you can increase your uninsured/underinsured motorist (UM/UIM) coverage by combining the coverage limits for multiple vehicles on one policy or across separate policies. This can provide you with greater financial protection in the event of an accident with an uninsured or underinsured driver.

However, it's important to note that even in states that allow stacking, insurance companies may include an "anti-stacking provision" in their policies, which prevents you from making multiple UM claims for a single accident. Additionally, some states that permit stacking may also allow insurers to opt out of offering it. Therefore, it is crucial to review your policy carefully and understand the laws in your state.

The availability of stacking as an option depends on the specific regulations in your state. Some states expressly forbid or allow stacking, while others do not have specific laws regarding it. To find out if stacking is permitted in your state, it is recommended to contact your car insurance company or a local attorney. They can provide you with accurate and up-to-date information regarding the legality and availability of stacking in your area.

Furthermore, even if stacking is allowed in your state, there may be certain conditions or limitations. For example, some states may require that all vehicles involved in the stacking be covered by separate policies, or there may be restrictions on the number of vehicles that can be stacked. It is important to understand these nuances before making any decisions regarding your insurance coverage.

Stacking can be done within or across policies

Stacking auto insurance is an option in some states that lets you make claims for injuries from one accident using two uninsured motorist insurance (UM) policies, or claims from two vehicles under one policy. Stacking can be done within or across policies, also known as vertical and horizontal stacking, respectively.

Stacking Within Policies

Vertical stacking, or intrapolicy stacking, combines coverage limits for multiple vehicles on one policy. For example, if you have two cars on a single car insurance policy with an uninsured motorist (UM) limit of $40,000, you could potentially combine your UM coverage limits for a total of up to $80,000. This type of stacking is useful if you have multiple vehicles that you want to insure under the same policy and want to increase your coverage limit.

Stacking Across Policies

Horizontal stacking, or interpolicy stacking, allows you to stack coverage across multiple vehicles insured under multiple policies. This type of stacking typically only applies to policies under a single company. For example, if you have insurance for your own vehicle with a $35,000 UM bodily injury coverage limit and your name is also on your parent's insurance policy, which has $25,000 in UM bodily injury coverage, you can stack these policies for $60,000 in coverage. This type of stacking is useful if you have multiple policies with different people, such as a spouse or family member, and want to increase your overall coverage limit.

It's important to note that not all states allow insurance stacking, and the rules for stacking may vary by state. Additionally, even if your state allows stacking, your insurer may not offer it. Therefore, it's essential to check with your insurance provider to understand the specific rules and options available to you.

Stacking increases the amount of money you can get for injuries

Stacking insurance is an option in some states that lets you make claims for injuries from one accident using two uninsured motorist insurance (UM) policies, or claims from two vehicles under one policy. Stacking increases the amount of money you can get for injuries by allowing you to combine the UM coverage you have on each vehicle, increasing the payment limits of your insurance. This is especially useful if you are injured in an automobile accident and the at-fault driver has little or no insurance.

For example, let's say your household owns two vehicles, each with its own policy and a UM and UIM limit of $50,000. By stacking your policies, you can increase the limits. So, if someone in your household gets into an accident with an uninsured driver, instead of having a maximum amount of $50,000, that person can claim up to $100,000.

Another example would be if you have coverage for two cars under one policy, both with $50,000 in uninsured motorist bodily injury coverage. If a driver without enough insurance hits one of the cars, you can claim up to $100,000 in medical benefits.

Stacking insurance is a pro-consumer, pro-victim law that is only available in a few states. It is a useful option to have, as statistics show that about 12.6% of motorists on the road in 2019 were driving without insurance, and this number rises to nearly 13% as of 2012. This means that victims in many accidents will have a hard time receiving compensation from the drivers responsible. Stacking can help victims receive greater compensation not only for medical bills and property damage but also for future medical and rehabilitation costs, lost wages, reduced earning capacity, mental anguish, and other expenses related to the accident.

There are a few things to keep in mind when considering stacking insurance. First, you must live in a state that allows stacking and have UM/UIM coverage on either two vehicles under one policy or two vehicles under two separate policies. Additionally, some states that allow stacking also let insurers choose not to offer it, so it's important to check the specifics of your policy. You may also have to pay more for the option to stack, and you need to elect stacking when you buy the policy, as you cannot retroactively select it after an accident.

Stacking is beneficial if you are injured and your medical bills exceed one car's limits

Stacked insurance is a way to combine policy limits from multiple vehicles, providing greater coverage after an accident. This is especially beneficial if you are in an accident with an uninsured or underinsured driver. In such cases, stacked insurance can help cover your medical bills if your expenses exceed the limits of one car's insurance policy.

Uninsured motorist (UM) coverage applies if the other driver is at fault and does not have insurance, or if you are the victim of a hit-and-run accident. Underinsured motorist (UIM) coverage applies if the other driver is at fault and their insurance coverage is insufficient to cover your costs. In this case, their insurance company will pay up to their policy limit, and your insurance company will cover the rest, up to your coverage limit.

Stacked insurance allows you to increase your UM/UIM coverage by combining the limits from multiple vehicles under one policy (vertical stacking) or across multiple policies (horizontal stacking). This means that if your medical bills exceed the limit of one car's insurance policy, you can tap into the coverage of another vehicle or policy to help cover the costs.

For example, let's say you have two cars, each with a UM/UIM coverage limit of $50,000. If you are in an accident with an uninsured or underinsured driver and your medical bills amount to $75,000, you would be left with a $25,000 shortfall if you only had coverage for one car. However, with stacked insurance, you can combine the coverage limits of both cars, giving you a total of $100,000 in coverage, which would be sufficient to cover your medical expenses.

It is important to note that stacked insurance is not available in all states, and even in states where it is allowed, there may be restrictions or limitations. Additionally, stacked insurance typically comes with higher premiums than unstacked insurance. Nevertheless, if you are concerned about being adequately covered in the event of an accident with an uninsured or underinsured driver, stacked insurance can provide valuable peace of mind and financial protection.

Frequently asked questions