Auto Insurance Unstacked: Understanding The Basics

Stacked auto insurance is a way to increase your uninsured motorist coverage by combining the bodily injury limits of each vehicle on your policy. This is especially helpful if an uninsured driver or someone without much insurance hits your vehicle. Unstacked auto insurance, on the other hand, refers to auto insurance coverage limits that cannot be combined across vehicles or policies.

Stacked insurance is more expensive than unstacked insurance

Stacked insurance combines the uninsured/underinsured motorist coverage limits for multiple vehicles or policies, increasing the maximum amount an insurer will pay for a claim. This is a great way to safeguard your finances in the event of an accident with an uninsured or underinsured driver. However, it is generally more expensive than unstacked insurance.

Higher coverage, higher cost

Stacked insurance provides more coverage but also comes with a higher price tag. This is because the coverage limits are higher, meaning you'll have to pay less out of pocket for an uninsured motorist claim. The higher your coverage limits, the less money you'll have to pay out of pocket. This can be especially useful if you live in a state with a high number of uninsured drivers.

Unstacked insurance limits

With unstacked insurance, your coverage is limited to the specific coverage limit for the vehicle in question. The limits remain separate even if you insure more than one vehicle or live in the same household as another insured driver. Unstacked insurance is usually cheaper because it offers lower coverage limits.

Stacking options

There are two ways to stack car insurance: vertically (within one policy) and horizontally (across multiple policies). Vertical stacking combines multiple coverage limits from one insurance policy to get a higher uninsured motorist limit. Horizontal stacking allows policyholders to stack coverage across multiple vehicles insured under multiple policies.

Stacked insurance considerations

While stacked insurance offers better financial protection, it's important to consider your budget and coverage needs before choosing this option. Stacked insurance may be most beneficial for those with multiple vehicles or those who live in areas with a high rate of uninsured motorists. If you only have one vehicle or live in a low-risk area, unstacked insurance may be a more cost-effective option.

Stacked insurance is not available in all states

Some states only allow one type of stacking but not the other. There are two main types of insurance stacking: vertical stacking (intrapolicy stacking) and horizontal stacking (interpolicy stacking). Vertical stacking combines coverage limits for multiple vehicles insured under the same policy. Horizontal stacking, on the other hand, allows policyholders to stack coverage across multiple vehicles insured under multiple policies. Twenty-two states allow both forms of stacking, while 10 only allow vertical stacking.

Even if your state allows stacking, your insurer might not. Some states also have specific limits on stacking, so it's essential to speak directly with your provider to explore your options.

The availability of stacked insurance depends on your insurance company, state, and existing coverage. Stacked insurance is generally more expensive than unstacked insurance because it provides higher coverage limits. However, it offers better financial protection against uninsured motorists.

Stacked insurance is useful if you live in a state with lots of uninsured motorists

Stacked insurance is a great way to protect your finances in the case of an accident, especially if you live in a state with a high percentage of uninsured motorists. Accidents can be costly, and if you are in an accident with an uninsured driver, you may have to pay some of the medical costs yourself. Stacked insurance increases your coverage limit, so you will have to pay less out of pocket.

There are two ways to stack car insurance: vertically (within one policy) and horizontally (across multiple policies). For example, if you own five cars, all on a single policy, and each car has a UM/UIM limit of $50,000, you can choose to stack the policy on each car. If you have an accident in one of the cars with an uninsured motorist, you can file a $50,000 claim for every vehicle, for a total of $250,000.

Now consider stacking across multiple policies. If you have a $20,000 policy on one car and a separate $50,000 policy on another, and you get into an accident with an uninsured driver while driving either, you can file claims under both for a total of $70,000.

To get stacked insurance, you must have uninsured/underinsured motorist coverage on multiple vehicles, provided by one policy or multiple policies. You must also live in one of the 32 states that allow insurance stacking. Your ability to stack insurance is also dependent on your car insurance company and your state's laws. Certain states, like Arkansas and Ohio, allow insurers to deny customers the ability to stack coverage as long as they are clear and unambiguous in the policy.

The only real disadvantage of stacked insurance is that you will typically pay slightly higher premiums for higher coverage limits. However, this added cost can be worth it if you live in a state with a high percentage of uninsured motorists, such as Florida, which has an estimated 20.9% of uninsured drivers.

Stacked insurance is only relevant if you own multiple vehicles

There are two types of insurance stacking: vertical stacking and horizontal stacking. Vertical stacking, also known as intrapolicy stacking, involves combining coverage limits for multiple vehicles insured under the same policy. For example, if you own two cars with $15,000 of uninsured motorist coverage each, you can vertically stack the policies to have $30,000 in combined coverage.

Horizontal stacking, also called interpolicy stacking, allows policyholders to stack coverage across multiple vehicles insured under multiple policies. For instance, if you have insurance for your own vehicle with a $35,000 uninsured motorist bodily injury coverage limit, and your name is also on your parent's insurance policy with a $25,000 limit, you can stack these policies for $60,000 in coverage. However, horizontal stacking generally only applies when the policies are from the same insurance company.

The availability of stacked insurance depends on your state and insurance company. While some states allow both types of stacking, others permit only one type or none at all. Additionally, some states have specific limits on the number of policies that can be stacked. For example, Wisconsin limits stacking to only three vehicles.

When deciding whether to opt for stacked insurance, consider the number of vehicles you own and the percentage of uninsured drivers in your state. Stacked insurance is particularly beneficial if you own multiple cars and live in an area with a high rate of uninsured motorists. In contrast, if you only have one vehicle or live in a low-risk area, unstacked insurance may be more suitable.

Stacked insurance is a combination of coverage limits from multiple policies or vehicles

Stacked insurance combines the coverage limits from multiple policies or vehicles to increase the maximum amount an insurer will pay for a claim. This is particularly useful if you get into an accident with an uninsured or underinsured motorist, as it can help to protect your finances. Stacked insurance can be done in two ways: vertically (within one policy) or horizontally (across multiple policies).

For example, let's say you own three vehicles, each with its own policy and a UM/UIM limit of $15,000. By choosing to stack the policies, you can increase the limits. So, if you get into an accident with an uninsured driver, instead of having a maximum of $15,000, you can claim up to $45,000.

Another example would be if you have insurance for your vehicle with a $35,000 uninsured motorist bodily injury coverage limit, and your name is also on your parent's insurance policy, which has $25,000 in uninsured motorist injury coverage. By stacking these policies, you can increase your coverage to $60,000 in the event of an accident with an uninsured driver.

It's important to note that not all states allow insurance stacking, and the rules for stacking may vary depending on the state. Additionally, your insurance company and existing coverage may also determine your ability to stack insurance.

Unstacked insurance, on the other hand, refers to coverage limits that cannot be combined across vehicles or policies. With unstacked insurance, you are limited to the specified coverage limit for the vehicle or policy in question. This type of insurance is typically cheaper than stacked insurance because it offers lower coverage limits.

Frequently asked questions