Stacked auto insurance combines the uninsured/underinsured motorist coverage limits for multiple vehicles or policies in order to increase the maximum amount an insurer will pay for a claim, while unstacked insurance does not allow combined coverage limits. Stacked insurance is only available in 32 states.
Key Things to Know About Stacked vs. Unstacked Insurance
- You can stack insurance vertically (within one policy) or horizontally (across multiple policies).
- Your ability to get stacked insurance depends on your insurance company, state, and existing coverage.
- Unstacked insurance is usually cheaper than stacked insurance because it offers lower coverage limits.
- Stacked insurance offers better financial protection against uninsured motorists than unstacked coverage.
How Stacked Insurance Works
There are two ways to stack car insurance. Stacking can be accomplished vertically within one policy or horizontally across more than one policy.
Vertically Stacked Insurance
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.
Horizontally Stacked Insurance
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.
Advantages of Stacked Insurance
Stacked insurance is a great way to safeguard your finances in case you are in an accident caused by an uninsured motorist. Severe accidents can be costly, and the higher your coverage limits are, the less money you will have to pay out of pocket for an uninsured motorist claim.
How to Get Stacked Insurance
To get stacked insurance, you must have uninsured/underinsured motorist coverage on multiple vehicles, provided by one policy or multiple policies. In addition, you must live in one of the 32 states that allow insurance stacking.
Your ability to stack insurance is also dependent on your car insurance company. 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.
States That Allow Insurance Stacking
- Delaware (horizontally only)
- Georgia (horizontally only)
- New Hampshire
- New Jersey (horizontally only)
- New Mexico
- New York (horizontally only)
- North Carolina (horizontally only)
- Oklahoma (horizontally only)
- Oregon (horizontally only)
- Rhode Island
- South Carolina
- Tennessee (horizontally only)
- Texas (horizontally only)
- Utah (horizontally only)
- West Virginia
How Unstacked Insurance Works
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 limits 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.
Advantages of Unstacked Insurance
Since unstacked insurance gives you a lower coverage limit than stacked insurance, the premiums are typically lower. If you’re concerned about the added cost of stacked insurance, unstacked coverage might be the right choice for you.
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.