Stacked vs Unstacked Car Insurance: A Comprehensive Guide

By Randy Luton | Last Updated: 02/06/2024

In the mazelike world of auto insurance, consumers often find themselves completely baffled by the lots of options available. Among these choices, the concept of stacked VS unstacked insurance emerges as a pivotal consideration. This article delves into the nuances of these two forms of insurance, explaining the differences, advantages, and potential drawbacks of each. Understanding these options is crucial for making informed decisions about your auto insurance coverage.

What is stacked vs unstacked insurance?

  1. Stacked Insurance: Stacked insurance is a robust construct within the domain of auto insurance, allowing policyholders to combine the limits of coverage for multiple vehicles under one policy or across several policies they own. This aggregation effectively elevates the ceiling of financial protection in the event of an accident, particularly one involving an underinsured – uninsured motorist.
  2. Unstacked Insurance: In the domain of car insurance, “stacking” involves combining the uninsured motorist (UM) coverage limits from different policies or multiple vehicles. To illustrate, if you have a UM limit of $25,000 in one policy and $50,000 in another, stacking those limits would result in a total of $75,000 in UM bodily injury coverage.

The extent of stacking benefits depends on the number of vehicles you own under a single policy and the number of policies associated with your name. For instance, if you possess two cars under one policy, you can stack their coverage limits. Similarly, if your name appears on multiple policies, such as a spouse’s or family member’s, you may have the option to stack coverage limits for those vehicles.

Two types of car insurance stacking

Insurance stacking comes in two forms: within one policy (vertical stacking) and across multiple policies (horizontal stacking). Some states permit only one type, while others don’t allow stacking. It’s crucial to understand your options based on your state’s regulations.

  1. Horizontal stacking, or interpolicy stacking, allows policyholders to combine coverage across multiple vehicles insured under different policies with the same company. However, attempting to file the same claim with different insurers for multiple payouts is considered insurance fraud and is not genuine stacking.
  2. Vertical stacking, or intrapolicy stacking, involves combining coverage for multiple vehicles insured under a single policy. For instance, if you own two cars covered by the same auto policy with $15,000 of uninsured motorist (UM) coverage, stacking vertically would result in a total of $30,000 in combined UM bodily injury coverage.

In simpler terms, stacking within one company’s policies is legitimate, but attempting to claim from different insurers for the same incident is considered fraud.

Is there a difference between stacked and unstacked insurance?

The primary difference between stacked and unstacked insurance hinges on the potential coverage limit. Stacked insurance offers an augmented safety net, combining the limits of multiple vehicles to furnish a higher threshold of protection. Unstacked insurance, while potentially more economical, provides a more categorized and limited scope of coverage.

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Do all states allow car insurance stacking?

If there are many drivers without insurance in your state, it might be a good idea to think about stacking your insurance coverage, if it’s an option for you. This is especially important if you or the people who often ride with you don’t have their own health insurance.

To find out if stacked coverage is right for your policy, consider talking to your insurance agent. They can provide you with a quote and help you understand if this type of coverage is a good fit for your situation.

Single policy stacking and multiple policy stacking are allowed in these states:

  • Alabama
  • Arkansas
  • Colorado
  • Florida
  • Hawaii
  • Indiana
  • Kentucky
  • Mississippi
  • Missouri
  • Montana
  • Nevada
  • New Hampshire
  • New Mexico
  • Ohio
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • Vermont
  • Virginia
  • West Virginia
  • Wisconsin
  • Wyoming

States that allowing multiple policy stacking:

  • Delaware
  • Georgia
  • New Jersey
  • New York
  • North Carolina
  • Oklahoma
  • Oregon
  • Tennessee
  • Texas
  • Utah

Do all car insurers offer stacked insurance?

Not all car insurance companies in the United States offer stacked insurance. Prominent insurers providing this option include, but are not limited to, State Farm, GEICO, and Allstate. It’s pivotal for policyholders to inquire with their insurer about the availability of stacked insurance.

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Advantages of stacked insurance and unstacked insurance

Here are the advantages of stacked insurance

  • Enhanced Coverage Limits: Stacked insurance allows for a consolidated, higher coverage limit, offering superior financial protection.
  • Flexibility in Policy Utilization: It provides the flexibility to combine limits across vehicles or policies.
  • Protection against Underinsured Motorists: It offers better coverage in incidents involving underinsured motorists.
  • Comprehensive Safety Net: Stacked insurance creates a more extensive safety net for the policyholder.
  • Customizable Coverage: Offers the option to tailor coverage based on multiple vehicles’ combined value.

Here are the advantages of unstacked insurance

  • Lower Premiums: Generally, unstacked insurance comes with lower premiums compared to stacked options.
  • Simplicity in Policy Management: It offers straightforward, singular coverage per vehicle, making policy management less complex.
  • Suitable for Single-Vehicle Owners: Ideal for individuals who own only one vehicle.
  • Clear Cut Claim Process: Claims are often more straightforward without the intricacies of multiple policies or vehicles.
  • Lower Risk Premiums: Since coverage is limited to each vehicle, the risk premium is often lower.

Disadvantages of stacked and unstacked insurance

These are the disadvantages of stacked insurance:

  • Higher Premiums: Stacked insurance typically has higher premiums due to increased coverage limits.
  • Complex Policy Management: Managing multiple vehicles or policies under stacked insurance can be complex.
  • Geographical Limitations: Not all states or insurers offer stacked insurance options.
  • Potential for Overinsurance: There’s a risk of paying for more coverage than necessary.
  • Restrictions in Policy Transfer: Limitations may exist when transferring or modifying existing stacked policies.

These are the disadvantages of unstacked insurance:

  • Limited Coverage Per Vehicle: Each vehicle has a distinct coverage limit, which might be insufficient in major incidents.
  • No Aggregate Protection: Lack of combined coverage limits for multiple vehicles.
  • Risk in Multi-Vehicle Accidents: In accidents involving multiple vehicles, coverage might be inadequate.
  • Less Ideal for Multiple Vehicle Owners: Not the most economical or protective choice for those owning several vehicles.
  • Restrictions Against Uninsured Motorists: Offers limited protection in accidents with uninsured or underinsured motorists.

Is stacked insurance worth it?

Choosing the right car insurance coverage involves a careful consideration of your individual needs and budget. Rather than assuming that more coverage is always better, it’s crucial to assess what matters most to you as a driver. Start by discussing liability coverage with your agent to make an informed decision. Here are key factors to explore:

  1. If you already have health insurance, it covers medical bills from accidents once uninsured motorist coverage is exhausted. For those with high-deductible health plans, stacked coverage may be a cost-effective alternative.
  2. Consider your passengers – uninsured motorist coverage extends to their medical bills. If you frequently have passengers, stacked insurance can protect them without tapping into their own coverage.
  3. Evaluate the impact on your premium – stacking insurance might slightly or significantly increase your premium. Discuss with your agent to understand the financial implications based on factors like driving history and the number of vehicles on your policy.
  4. Check for personal injury protection (PIP) or medical payments coverage in your policy. These act as primary coverage, paying out first in a covered loss. Understanding these components helps in assessing the overall coverage limits and making an informed decision tailored to your needs.

Ultimately, a comprehensive discussion with your agent helps tailor your insurance choices to your specific needs, ensuring a well-informed decision.

Incorporating these nuances of stacked vs unstacked car insurance into your decision-making can profoundly impact your financial protection and peace of mind. Understanding the stacked or unstacked insurance puzzle is not merely about cost analysis; it’s a strategic decision reflecting your lifestyle, vehicle ownership, and risk management preferences.

Frequently Asked Questions

What is the Cost of Stacking Insurance?

The cost varies based on the number of vehicles, coverage limits, and the insurer’s policy. Typically, it’s higher than unstacked insurance due to increased coverage.

Can Other Types of Car Insurance Be Stacked?

Stacking is predominantly applicable to uninsured and underinsured motorist coverage. However, policies and regulations vary, so it’s crucial to consult with your auto insurer.

Is It Possible to Reject Stacked Car Insurance?

Yes, policyholders can opt for unstacked insurance, especially if they seek lower premiums or have only one vehicle.

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Editorial Guidelines: The above is meant as general information to help you understand the different aspects of auto insurance. This information does not refer to any specific auto insurance policy. Coverages and other features vary between insurers, vary by state, and are not available in all states. References to costs of coverages/repair, average or typical premiums, amounts of losses, deductibles, etc., are indicative and may not apply to your situation. We encourage you to speak to our insurance representative and to read your policy contract to fully understand your coverages.

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Randy Luton is the Founder and CEO of RateForce. He is passionate about InsurTech services and has in-depth knowledge about the auto insurance sector of the USA.