Stacked Vs. Unstacked Auto Insurance
Most people never have to deal with the terms stacked auto insurance or unstacked auto insurance, but it is still a good thing to be aware of. Numerous things need to happen in order for these types of auto insurance to have an impact on your life. Stacked automobile insurance is an option for people who own and get insurance policies on multiple vehicles. It is a type of automobile insurance policy that goes above and beyond uninsured motorist coverage. For most people, uninsured motorist coverage policies and UIM coverage policies are enough to satisfy their financial protection needs.
If, for example, you have uninsured motorist coverage in the amount of $50,000, and an accident where the other driver does not have insurance and causes $75,000 of damage, you could be out of luck if you have an unstacked automobile insurance plan. By stacking your automobile insurance coverage, if you have more than one vehicle that is insured, you will be able to take some of the coverage from the other car and apply it to the $75,000 of damage. This can be a convenience for people who own and insure multiple cars, saving them a possible $25,000 that could have otherwise come out of pocket.
What Is Uninsured/Underinsured Motorist Coverage?
On average, 16% of drivers do not have an automobile insurance policy. Driving without a car insurance policy is against the law, but people still do it. To protect yourself from another person not having insurance to pay for the damages to you or your vehicle if they are at fault in an accident that causes damage, uninsured and underinsured motorist coverage exists. This type of insurance plan gives you additional protection by paying for what another person’s insurance policy should have paid for, had they had enough insurance to do so.
Protecting yourself from reckless drivers is essential, particularly with so many drivers who do not have adequate automobile insurance. Some states have a higher percentage of insured vehicles than others, but regardless of the state you are living in, having an uninsured or underinsured motorist coverage plan is valuable. Some states also require that a person has this type of policy as part of the minimum coverage limits set by law. If your state requires you to have an uninsured motorist coverage policy, and you are caught driving without one, the penalties can be severe.
Just like other types of automobile insurance plans, there is a coverage limit that is purchased by the policyholder. The coverage limit is the most money an insurance provider will pay out if a covered situation or situations happen.
Non-Stacked Uninsured Motorist Coverage (Unstacked)
Unstacked uninsured motorist coverage is a type of coverage that people will have if they only have insurance for one vehicle, or do not seek out stacked coverage. For people who have multiple cars that they purchase insurance for, they may have either stacked or unstacked automobile insurance. Most people choose unstacked automobile insurance and get coverage limits that are likely to cover all of their accident-related expenses. For people who have multiple vehicles that are not worth a large sum of money, unstacked uninsured motorist coverage is likely the ideal option. Some people do choose to get stacked uninsured motorist coverage, which will be discussed next.
Stacked Uninsured Motorist Coverage
Stacked motorist coverage allows you to, in essence, borrow money from other insurance policies that you own if an accident costs more than the limits you have selected for that individual vehicle. This means that each car has more protection overall. In order for stacked automobile insurance coverage to be purchased, a person must have more than one insured vehicle. There are pros and cons to having uninsured motorist coverage that is stacked.
Pros and Cons
One of the major benefits of stacked UM coverage is that people who have this type of policy are covered when they are driving or riding in an automobile. It does not matter whether the car they are in or driving is owned, borrowed, rented, or even a friend or family members car. Non-stacked UM coverage covers injuries while a person is occupying the specific car or cars that are listed on the policy. Injuries that occur when in other vehicles might not be covered. This means that a stacked insurance policy will have more flexible coverage overall.
Another major benefit of stacked insurance is that if an accident is particularly expensive, and the other driver is uninsured, you will be covered for much more than a single policy that is unstacked policy.
Unfortunately, because of these added benefits, a stacked policy is more expensive. This is due to you having more coverage overall with the policy. You are essentially doubling your coverage limit, and possibly increasing it, even more, depending on the number of cars you’re getting a policy for. Also, stacked automobile insurance coverage is not allowed in every state, and some other states have restrictions. Check the laws in your state to determine whether you can purchase this type of policy. You can also contact automobile insurance companies here that are known to sell this type of policy and have them verify.
Another negative to having stacked automobile insurance is that all of the policies being stacked need to be in your name. This can make the process a little bit complicated for a family of people, particularly if none of the family members want all of the policies in their name.
When Does Stacked Vs. Non-Stacked UM Pay?
Stacked UM policies pay out when you are in an accident, the other driver is uninsured, and the damages to you are more than is covered in your regular uninsured or underinsured motorist coverage plan. Non-stacked UM plans payout whenever you are in an accident, but if you are in an accident where the damages are more than your uninsured motorist coverage, you are not able to borrow coverage from another vehicle you have insured.