Find out the answer to the Stacked vs. Unstacked Car Insurance dillema and decide which one suits you best!
Car insurance can be a complex topic, and understanding the different coverage options available can be challenging. For example, figuring out the answer to the Stacked vs. Unstacked Car Insurance dilema.
Let’s talk about both of these options, their pros and cons, and their differences, so you can decide which option is right for you. Also, if you want to check out more financial tips on our website, you can click on this link!
What is Stacked Car Insurance?
It allows you to combine coverage limits – the maximum amount your insurer will pay toward a covered claim – from multiple vehicles on your policy or separate policies, such as combining Uninsured Motorist Coverage (UM) and Underinsured Motorist Coverage (UIM). This means that if you are involved in an accident with an uninsured or underinsured driver, stacked insurance can significantly increase the amount of coverage available to pay for your medical bills, lost wages, and other damages.
For example, let’s say you have two cars insured on your policy, each with a UM/UIM limit of $25,000. If you are injured in an accident caused by an uninsured driver and your medical bills total $50,000, stacked insurance would allow you to use the combined UM/UIM limits from both vehicles, providing you with a total of $50,000 in coverage.
Pros and Cons
Pros
- Increased Coverage Limits: it can significantly increase your UM/UIM coverage, which can be crucial if you are seriously injured in an accident caused by an uninsured or underinsured driver;
- Peace of Mind: knowing that you have more coverage can provide peace of mind and help you avoid financial hardship in the event of an accident.
Cons
- Higher Premiums: typically costs more than unstacked insurance because it provides more coverage;
- Not Available In All States: it is not available in all states. Be sure to check with your insurance company to see if it is an option in your state;
- Property Damage Coverage Limits: it can’t be stacked, you can only stack insurance to increase bodily injury coverage.
States That Allow Stacking Car Insurance
As of May 2023, 32 states may allow stacking, including:
- Alabama;
- Arkansas;
- Colorado;
- Delaware (across multiple policies only);
- Florida (you must select stack or non-stacked UM when purchasing a policy);
- Georgia (across multiple policies only);
- Hawaii (you must select stack or non-stacked UM when purchasing a policy);
- Indiana;
- Kentucky;
- Mississippi;
- Missouri;
- Montana;
- Nevada;
- New Hampshire (you must select stack or non-stacked UM when purchasing a policy);
- New Jersey (across multiple policies only);
- New Mexico;
- New York (across multiple policies only);
- North Carolina (across multiple policies only);
- Ohio;
- Oklahoma (across multiple policies only);
- Oregon (across multiple policies only);
- Pennsylvania (you must select stack or non-stacked UM when purchasing a policy);
- Rhode Island;
- South Carolina;
- Tennessee (across multiple policies only);
- Texas (across multiple policies only);
- Utah (across multiple policies only);
- Vermont;
- Virginia;
- West Virginia;
- Wisconsin;
- Wyoming (across multiple policies only).
What is Unstacked Car Insurance?
It applies the UM/UIM coverage limit to each insured vehicle separately. This means that the coverage limits are not combined, even if you insure multiple vehicles. For example, if you had unstacked insurance with a UM/UIM limit of $25,000 per vehicle, you would only be eligible for up to $25,000 in coverage, regardless of how many vehicles you have insured.
Pros and Cons
Pros
- Lower Premiums: is typically cheaper than stacked insurance because it provides less coverage.
Cons
- Lower Coverage Limits: it may not provide enough coverage to cover your medical bills and other damages if you are seriously injured in an accident caused by an uninsured or underinsured driver;
- Increased Financial Risk: if you drive frequently or have passengers in your car often, unstacked insurance may leave you exposed to a greater financial risk in the event of an accident.
Stacked vs. Unstacked Car Insurance: What’s The Difference?
| Feature | Stacked Car Insurance | Unstacked Car Insurance |
|---|---|---|
| Coverage Limits | Combined | Separate |
| Coverage Amount | Higher | Lower |
| Premiums | More Expensive | Less Expensive |
Stacked vs. Unstacked Car Insurance: Which One Should I Get?
The decision will depend on your individual needs and budget. However, here are some thing to consider:
- Comfort with Your Health Insurance Policy: your health insurance usually covers medical expenses after your auto insurance’s Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage is exhausted. If your health insurance has a high deductible, stacked coverage might save you money by providing additional protection;
- Impact on Premiums: stacking your auto insurance can affect your premium, either slightly or significantly. This depends on factors like the number of vehicles insured, your driving history, and your insurance provider. Consulting with your agent will help you understand the cost implications of stacking your coverage;
- Frequency of Driving with Passengers: UM and UIM coverage also covers your passengers’ medical expenses if they are injured in an accident with an uninsured or underinsured driver. If you often drive with passengers, stacked coverage can offer them better protection without relying on their own insurance;
- Medical Payments Coverage or Personal Injury Protection: if your policy includes medical payments coverage or Personal Injury Protection (PIP), these cover your medical expenses first in an accident. UM and UIM coverage come into play after these primary coverages are exhausted. If you have high limits for medical payments or PIP, stacking your insurance might be less necessary;
- Prevalence of Uninsured Motorists in Your Area: stacked insurance specifically protects against accidents with uninsured or underinsured drivers. To assess the need for stacked coverage, check the percentage of uninsured motorists in your area.