What Are Stacked Limits of Uninsured Motorist Coverage?

Auto insurance protects drivers and vehicles. A key aspect of this protection is preparing for accidents caused by drivers who lack adequate insurance. Uninsured motorist (UM) coverage safeguards policyholders from financial burdens in such incidents.

Basics of Uninsured Motorist Coverage

Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage are components of an auto insurance policy designed to protect you from financial losses when involved in an accident with a driver who has no insurance or insufficient insurance. UM coverage specifically addresses situations where the at-fault driver has no liability insurance, while UIM coverage applies when the at-fault driver’s insurance limits are not high enough to cover your damages. This coverage can also extend to hit-and-run incidents where the at-fault driver cannot be identified.

These coverages typically compensate for medical expenses, lost wages due to injuries, and pain and suffering. In some instances, UM/UIM coverage may also include property damage to your vehicle. While some jurisdictions mandate UM/UIM coverage, many states offer it as an optional addition to a standard auto insurance policy. Adding this coverage is often recommended due to the prevalence of uninsured drivers.

Understanding Stacked UM Limits

“Stacked limits” in uninsured motorist coverage allows an insured individual to combine or multiply the UM/UIM coverage limits from one or more policies. This increases the total available payout in an accident with an uninsured or underinsured driver. Instead of being limited to a single vehicle’s coverage amount, the total available coverage becomes a multiple of that amount.

For example, if a policy has a UM coverage limit of $50,000 per person and covers two vehicles, stacking allows a combined limit of $100,000 per person for an accident claim. This provides a larger pool of funds to cover significant expenses, such as extensive medical bills or prolonged lost wages. Stacking limits typically results in a slightly higher premium, reflecting the increased financial protection offered.

Types of Stacking

There are two primary ways uninsured motorist limits can be stacked: intra-policy stacking and inter-policy stacking. Intra-policy stacking occurs when a single insurance policy covers multiple vehicles, allowing the UM/UIM limits for each vehicle on that policy to be added together. For example, if one policy covers three cars, each with $50,000 in UM coverage, intra-policy stacking could result in $150,000 in available coverage for a single claim.

Inter-policy stacking applies when an individual has multiple separate auto insurance policies, potentially with different insurers, and combines the UM/UIM limits from these distinct policies. For instance, if you have two separate policies, each with $100,000 in UM coverage, inter-policy stacking could allow access to $200,000 in total coverage. Both types of stacking maximize available coverage in accident scenarios.

State Laws and Stacking

The legal landscape surrounding stacked UM limits varies across different states. Some states mandate that insurers offer stacking, or even include it automatically unless explicitly rejected by the policyholder. Other states permit stacking as an option, requiring policyholders to elect it and pay an additional premium.

Some states have anti-stacking laws that prohibit combining UM/UIM limits, regardless of the number of vehicles or policies. Policyholders should understand their specific state’s regulations and review their insurance policy language carefully. Consulting an insurance professional or the state’s insurance department can provide information regarding stacking options and requirements.