Buying auto insurance coverage for a vehicle can be complicated, particularly when we start looking at the definition of “stacked” versus “unstacked” auto insurance.
A stacked insurance plan is one in which an insurance policy can combine the uninsured and underinsured motorist coverage limits across multiple vehicles or policies in an effort to increase how much the insurer will pay for a claim. An unstacked insurance policy refers to coverage limits that are not combined across various policies or vehicles.
Understanding Stacked and Unstacked Insurance
When it comes to car insurance, understanding the difference between stacked and unstacked insurance is crucial. Stacked insurance allows policyholders to combine the uninsured motorists (UM) or underinsured motorists (UIM) coverage limits for multiple vehicles on the same policy. This means that if you have several vehicles insured under one policy, the coverage limits can be aggregated, potentially providing higher protection in the event of an accident.
On the other hand, unstacked car insurance does not combine coverage limits across multiple vehicles. Each vehicle has its own separate coverage limit, which can result in lower premiums. However, this also means that the protection you receive is limited to the individual coverage of each vehicle. Understanding these options helps you choose the right policy that fits your needs, especially if you own multiple vehicles or are concerned about uninsured motorists.
Examining Stacked Auto Insurance
Examining stacked car insurance and unstacked insurance only comes into play when we are discussing uninsured and underinsured motorist coverage (UM/UIM), which individuals typically purchase together. It is important to point out that uninsured and underinsured motorist coverage is not required of drivers in California. However, it is strongly recommended that all drivers consider purchasing this type of insurance to help protect them.
Uninsured motorist coverage is designed to kick in if you are struck by a driver without insurance, and underinsured motorist coverage is designed to kick in if you are struck by a driver who does not have enough insurance coverage to pay for your damages.
In some places around the country, individuals can “stack” their underinsured motorist coverage on top of a defendant’s insurance coverage to help to pay for damages in the event their losses exceed the total coverage of the at-fault driver.
However, California prohibits the stacking of insurance policies. This means that a person’s underinsured motorist insurance policy can only be used if their own coverage amount is greater than the total amount of coverage the at-fault driver had.
For example, let us suppose that the defendant who caused an accident carried only the minimum coverage required under California’s insurance laws ($15,000 per person and $30,000 per accident). If a person is struck by this driver and sustains $20,000 worth of medical bills, they would not be able to use their underinsured motorist coverage unless their coverage exceeded the defendant’s $15,000 amount.
Other states around the country do allow the stacking of underinsured motorist coverages. This allows those who sustained injuries to use their underinsured motorist coverage regardless of how much insurance coverage the other driver has.
As long as the at-fault driver has insurance, individuals can use their underinsured motorist coverage if their damages exceed the other person’s policy limits.
Working With an Attorney to Recover Compensation
If you or somebody you care about has been injured in an accident caused by another driver, but their insurance isn’t sufficient to pay for your damages, you need to work with an attorney immediately. A skilled lawyer will examine all avenues available to you to secure compensation.
Additionally, consider the role of medical payments coverage, which covers medical expenses for you and your passengers after an accident, paying out before other types of coverage. In some situations, it may be necessary to file a civil personal injury lawsuit against the at-fault driver to recover compensation from that person’s personal assets. The personal injury lawsuit process and recovering compensation from insurance carriers can be complicated, but an attorney will handle every aspect of your claim on your behalf.
Additionally, we strongly encourage you to examine your own insurance policy and consider purchasing higher amounts of uninsured and underinsured motorist coverage.
When choosing between stacked and unstacked auto insurance, particularly regarding uninsured and underinsured motorist coverage, it’s important to understand the benefits and drawbacks of each option.
Here’s a breakdown to help you decide which type of coverage might be best suited for your needs.
Pros of Stacked Insurance
- Increased Coverage Limits
Stacking allows you to combine the coverage limits of multiple vehicles under one policy, or multiple policies you own. This results in higher coverage limits, providing better protection against damages incurred in an accident with an uninsured or underinsured driver.
- Better Financial Protection
With higher combined limits, you’re less likely to have out-of-pocket expenses after a serious accident. This is especially beneficial in states with a high number of uninsured drivers or in accidents resulting in significant medical expenses.
- Flexibility in Claim Filing
Stacked insurance can offer more flexibility in how you file a claim. For instance, if one vehicle in your policy is involved in an accident, you might have the option to pull coverage from another vehicle’s policy to cover additional costs.
Cons of Stacked Insurance
- Higher Premiums
Because stacked insurance offers higher coverage limits, it typically comes with higher premiums. You’re essentially paying more to get more protection, which might not always be necessary depending on your specific situation.
- Not Available in All States
Stacking is not permitted in all states. In states like California, insurance policies cannot be stacked, which means you’re limited to the coverage limits of the policy for the vehicle involved in the accident.
- Complexity in Management
Managing stacked insurance policies can be more complex than handling a single unstacked policy. It requires you to keep track of multiple vehicles or policies and understand how they interact in terms of coverage.
Unstacked Car Insurance: Pros and Cons
Unstacked car insurance comes with its own set of advantages and disadvantages. One of the primary benefits is cost. Since unstacked insurance does not combine coverage limits across multiple vehicles, it generally results in lower premiums. This makes it an attractive option for budget-conscious drivers who want to save on their car insurance.
However, the downside of unstacked car insurance is the limited coverage it offers. If you are involved in an accident with an uninsured or underinsured driver, the coverage limits for each vehicle are not combined. This could lead to significant out-of-pocket expenses if the damages exceed the individual coverage limits. Therefore, while unstacked insurance can be more affordable, it may not provide sufficient financial protection in severe accidents.
Pros of Unstacked Insurance
- Lower Premiums
Unstacked insurance typically costs less than stacked insurance since each vehicle or policy is insured separately with its own limits. This can be a more economical option if budget is a major consideration.
- Simplicity
Managing an unstacked insurance policy is generally simpler. Each vehicle’s coverage is clear and distinct, without the complexities of combining limits or figuring out which vehicle’s insurance applies in different scenarios.
- Sufficient for Single-Vehicle Owners
For those who own only one vehicle, unstacked insurance is perfectly adequate, as there’s no additional vehicle to combine coverage from, making stacked insurance unnecessary.
Cons of Unstacked Insurance
- Limited Coverage
Each policy or vehicle has its own fixed limit, which might not be sufficient to cover all damages in the event of an accident, especially if it involves a serious injury and the at-fault driver is underinsured.
- Risk of Underinsurance
In cases where damages exceed the policy limits, you might end up paying out of pocket. This risk is higher with unstacked insurance, particularly in serious accidents.
When deciding between stacked and unstacked auto insurance, consider factors such as the number of vehicles you own, your geographic location, and your financial ability to handle potential out-of-pocket expenses. Consulting with an insurance professional can also help clarify which option aligns best with your circumstances.
Coverage Limits and Car Insurance
Coverage limits are a fundamental aspect of car insurance, defining the maximum amount your insurance provider will pay for a claim. In the context of stacked and unstacked insurance, these limits play a crucial role. For instance, with stacked insurance, if you have two vehicles on the same policy, each with $20,000 in UM/UIM coverage, the limits can be combined to provide $40,000 in total coverage. This can offer substantial financial protection in the event of an accident.
Conversely, unstacked insurance keeps the coverage limits separate for each vehicle. Using the same example, each vehicle would have its own $20,000 limit, which cannot be combined. This means that while unstacked insurance might be more affordable, it could also leave you with lower overall coverage. Understanding how coverage limits work in both scenarios helps you make an informed decision about your car insurance coverage.
States That Allow Insurance Stacking
Insurance stacking is not universally permitted across all states. Some states allow both vertical and horizontal stacking, while others only permit horizontal stacking or do not allow stacking at all. It’s essential to check with your insurance provider to understand the specific regulations in your state.
States that allow insurance stacking include Pennsylvania, Florida, and Georgia, among others. In these states, policyholders can combine coverage limits across multiple vehicles or policies, providing enhanced protection. However, in states like California, stacking is prohibited, meaning you are limited to the coverage limits of the policy for the vehicle involved in the accident. Always verify with your insurance provider to see if stacked insurance is an option available to you.
Choosing the Right Insurance Option
Selecting the right insurance option depends on various factors, including your individual circumstances and budget. When deciding between stacked and unstacked insurance, consider the cost of stacked coverage, the likelihood of encountering an uninsured driver, and the importance of having adequate medical coverage.
Stacked insurance may be a suitable choice for drivers who own multiple vehicles and want to ensure they have comprehensive financial protection in the event of an accident. It offers higher combined coverage limits, which can be crucial in severe accidents. On the other hand, unstacked insurance might be more appropriate for single-vehicle owners or those looking to save on their car insurance premiums. Consulting with an insurance professional can help clarify which option aligns best with your needs and financial situation.
Why Choose Callahan & Blaine for Underinsured Motorist Claims?
In California, recovering full compensation after an accident with an underinsured driver can be challenging due to restrictions on “stacking” policies. At Callahan & Blaine, we bring 40 years of experience navigating complex insurance laws and have achieved some of the largest personal injury settlements in U.S. history. Our attorneys understand how to investigate these claims thoroughly and work with insurance carriers to pursue every avenue for maximum recovery on behalf of our clients.
When you work with us, you’re backed by a team of highly experienced trial lawyers skilled in handling even the most challenging claims. Whether negotiating with insurers or filing a lawsuit against the at-fault driver, we take a comprehensive approach to get you the compensation you deserve. Contact us today at (714) 241-4444, or use our contact form to begin your case evaluation.
