What Is Insurance Stacking?
Stacking is a way to provide additional insurance coverage to protect against a driver who has little or no auto insurance. It normally pertains to uninsured and underinsured (UM/UIM) coverage, and it is an optional coverage, not mandatory.
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Requirements
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In order to stack coverage, the vehicle will likely need to carry uninsured/underinsured coverage since these are generally the only types of coverages that are permitted to be stacked in most states. Additionally, you must be insuring more than one vehicle since the coverage is stacked between multiple vehicles. Since this results in additional coverage, a higher premium is required.
How It Works
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If you are in an accident involving a another driver who does carry uninsured/underinsured coverage, your insurance company will pay you additional benefits. This is because your coverage will increase based on the number of vehicles you carry on your policy.
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Advantages
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The major advantage of stacking is that you are providing you and your family with the maximum benefit if you are involved in an accident where the other driver does not carry insurance or does not carry enough to pay for injuries and damages sustained. The only other recourse would be to sue the driver, which could be both costly and prove futile if the driver does not have substantial assets.
Another Method
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In some states, you may be able to stack between different policies. For example, you may insure one vehicle on one policy and two vehicles on another. By stacking, you will be able to stack three vehicles and receive triple the coverage. The UM/UIM limits on both policies must be the same for stacking to be permitted.
Example
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Suppose you are involved in an accident where the other driver is at fault and carries no automobile insurance, and your injuries and damages total $125,000. Assume your policy coverage for an uninsured motorist is 50/100 ($50,000 per person and $100,000 total per occurrence), and you insure three vehicles. By stacking the coverage for three vehicles, your limits would actually be $150,000 per person and $300,000 per occurrence, meaning you would be completely covered.
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