While only a few years ago stacking auto insurance coverage in most states was prohibited, now almost half of the United States allow for some form of coverage stacking. Stacking insurance coverage offers many benefits to car owners and attempts to limit the practice have resulted in many consumers not being adequately covered in major accidents.
Generally speaking, stacking car insurance coverage usually refers to increasing the limits on the uninsured motorists bodily injury coverage of a car insurance policy. If you own two or more vehicles, stacking coverage will allow you to increase the coverage for your uninsured motorists or underinsured motorist coverage significantly. For example, if you own two vehicles and have $100,000/$300,000 uninsured motorists bodily injury coverage on both vehicles, you can choose to stack the coverage and you will have $200,000/$400,000 coverage on both vehicles for a single accident. Adding a third car to the policy would increase the limits to $300,000 and $900,000.
Stacking the coverage does not change the uninsured motorist bodily injury coverage in any other way. The coverage will still provide reimbursement for damages and medical expenses that you suffer as the result of an accident that involves a driver that doesn’t have car insurance, or if you are the victim in a hit-and-run accident. The coverage is applicable to you, passengers in your vehicle and pedestrians as well.
Obviously, the largest advantage to stacking auto insurance coverage is the ability to substantially increase your policy limits for multiple vehicles. In the event of a major accident, your standard policy limits may not provide enough coverage to adequately pay the medical expenses and hospitalization costs of you and the passengers in your vehicle. By stacking the limits with policies from other vehicles, your coverage will go much further in paying your expenses.
If you have assets you want to protect, stacking auto insurance coverage is always a good idea. If you’re involved in an accident where auto insurance coverage doesn’t pay the expenses for all injured parties, you may become personally liable and your assets may be at risk. However, stacking auto insurance coverage will provide you more protection for people that may choose to sue or strip you of possessions.
The biggest potential drawback with stacking auto insurance coverage is the car insurance industry itself. Car insurance companies are constantly fighting legislation to allow auto insurance coverage stacking in many states as they claim that stacking coverage increases policy payouts and reduces insurance company profits. As a result, some insurance companies have started raising premiums in an effort to sway customers from choosing to stack coverage policies.
While stacking auto insurance coverage offers many benefits to the consumer, insurance companies may make it too expensive to be feasible in the end. If car insurance companies continue to raise the rates for uninsured motorist coverage, this valuable coverage type may become more of a luxury than the necessity that it really is.