Understanding the Difference Between Stacked and Unstacked Auto Insurance

Stacking insurance helps policyholders expand their coverage should they be in an accident with a driver who is either underinsured or uninsured. With stacked insurance, you can combine coverage limits of multiple policies or multiple vehicles that you insure with the same policy. It's important to note that you can only stack underinsured (UIM) or uninsured motorist (UM) bodily injury coverage. Conversely, you can't stack UIM and UM property liability coverage.

While thirty-two states in the U.S. allow some variant of stacked auto insurance, some insurers don't offer this option. Underinsured motorist coverage kicks in if you're in an accident, and the liable driver's auto insurance limit isn't sufficient to cover the damage (both property damage and injury). Uninsured motorist coverage kicks in when you're in an accident, and the liable driver is uninsured.

What Is the Difference Between Stacked Insurance and Unstacked Insurance?

• Stacked insurance provides broader coverage, while unstacked insurance offers regular coverage.
• Stacked insurance often costs more compared to unstacked insurance.
• Stacked insurance isn't allowed in all states, while unstacked insurance is available in each state.

How Does Stacked Insurance Work?

• Across Multiple Auto Policies - If your name is on more than one insurance policy, you can stack the coverage limits. Stacking across policies comes into play when your name is in your policy as well as in another policy, such as a family member's policy. This is also referred to as vertical stacking. For instance, your policy has $35,000 in underinsured/uninsured bodily injury liability coverage, and you're named in your spouse's auto policy which has $30,000 in underinsured/uninsured bodily injury liability coverage. In this case, you can pay slightly higher premiums to stack these two policies so that you increase your underinsured/uninsured bodily injury liability coverage limit to $65,000.

• Within One Auto Policy - If you own multiple vehicles which you've insured using one policy, you can pay higher premiums to stack the underinsured or uninsured coverage. Each auto has its coverage limit, and so you can stack those limits. This is also referred to as horizontal stacking. For instance, if you own two vehicles, each with a $15,000 coverage limit, you can pay slightly more to stack them so that you have $30,000 in coverage.

How Does Unstacked Insurance Work?

Unstacked insurance is any standard auto insurance policy. Of course, the terms of vehicle insurance policies do vary, but if you haven't stacked the underinsured/uninsured bodily injury liability coverage, then your auto insurance policy is unstacked. Your coverage is what's documented on your policy's declaration page.

How to Choose Between Stacked and Unstacked Insurance?

Stacked insurance can be worth getting if you can afford to pay a bit more in premiums, considering that 1 in 8 motorists in the U.S. are uninsured, and therefore, putting other motorists in danger. If your name is in multiple policies, or if you own multiple vehicles, it can be a cost-effective way of expanding your coverage. While stacking may cost more, it provides more security should you be in an auto accident with a motorist who is uninsured or underinsured. If you're weighing the pros and cons of stacking, you should talk to an independent insurance agent. They can help you figure out whether a stacked policy is ideal for you.

How Little & Sons Insurance Services Can Help

At Little & Sons Insurance Services, our team of auto insurance experts will help you find a tailored and affordable auto insurance policy that adequately protects you. Contact us today to get started.