Posted by: Merrill Burchell

Stacked auto insurance is a way to maximize medical coverage in the event of an accident caused by an uninsured motorist (UM) or underinsured motorist (UIM). The practice of “stacking” insurance refers to combining the UM/UIM coverage limits from multiple policies to force a higher cap on what carriers will pay out for post-injury care. Stacked car insurance is available to drivers in about 30 states – including Texas, New York, and Florida – who insure more than one vehicle or have more than one insurance policy on a single car.

When you have unstacked insurance, combining policy limits is not possible. This is the case for drivers who only own one policy on a single car, as well as for those who own multiple cars but are prohibited from stacking either by state law or their insurance carrier. Unlike with stacked insurance, unstacked drivers may file medical claims only on the actual car involved in an accident with an at-fault driver who doesn’t have enough insurance coverage. Premiums tend to be lower with unstacked insurance as a result.

Deciding whether or not to stack your insurance can depend on your location, monthly budget for car insurance premiums, and what your carrier permits in your policy. By understanding the difference between stacked and unstacked insurance, what works best for your lifestyle, and what is available in your state, you can make the most of either stacked or unstacked coverage.

Stacked Insurance: Making the Most of Multiple Policies

There are two ways to stack car insurance. Stacking can be accomplished vertically within one policy or horizontally across more than one policy.

Let’s look at an example of stacking auto insurance vertically within one policy. Pretend that you own five cars, all on a single policy. Each car has a UM/UIM limit of $50,000. If your state allows it, you may choose to stack the policy on each car. If you have an accident in just 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 horizontally across multiple policies. As long as you are using the same insurance company, you might be able to file a claim in an accident with a UM/UIM motorist on more than one policy. This applies even if the policies are for different cars. Therefore, if you have a $20,000 policy on one car and a separate $50,000 policy on another, and suffer damage from a UM/UIM driver while driving either, you can file claims under both for a total of $70,000.

Unstacked insurance: One Policy for One Vehicle

Unstacked auto insurance usually refers to holding a single policy on just one vehicle. However, unstacked coverage can also take the form of owning more than one car or policy, but deliberately choosing not to stack them in exchange for lower monthly premiums. Or, you might be prohibited from combining insurance limits by state law or the wording of your policy. Not all insurance carriers offer the option.

When you have unstacked car insurance, your payouts are capped at your policy’s standard limit for UM/UIM coverage, no matter how severe your injuries might be. If, for example, your policy’s limit is $40,000, you can collect no more than that $40,000 if you file a claim.

Unstacked insurance is the default for many insurance owners, especially since stacked coverage is not available in states such as Michigan.

Stacked vs Unstacked Auto Insurance: How to Choose

You may not have a choice when it comes to stacked vs unstacked car insurance. Some states completely outlaw stacking, while others allow insurance companies to take the lead in structuring policies.

Alabama, for example, permits stacking but only for three vehicles. And if you are deciding between stacked vs unstacked insurance in Florida, you’re not just permitted to stack UM/UIM policies, you can also decide to reject UM coverage altogether. The best way to ensure that you are receiving appropriate coverage for the most manageable premium is to check state laws and gather quotes from several insurance companies.

Other realities to keep in mind when choosing between stacked vs unstacked insurance:

• UM/UIM insurance may only apply if a UN/UIM driver causes the accident. In some states, if you are at fault, you might not be able to collect at all.
• Some policies and states do not permit stacking for motorcycles or any vehicle that is not a traditional four-wheeled car.

Depending on the state, you might not be allowed to stack benefits for accidents in which you were acting as the driver. At the same time, stacking UM/UIM to cover yourself or your family members when you are involved as passengers or pedestrians could be permitted.

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