Stacked vs. unstacked car insurance: What’s the difference?

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Written by
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Reviewed by
Farmers CSR for 4 Years
UPDATED: 2022-07-27T06:20:22.145Z
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uneven scales depicting stacked vs. unstacked insurance

Selecting car insurance coverage and limits can be tricky, especially if you're unfamiliar with some of the terminology. One of the confusing aspects of car insurance is “stacked” and “unstacked” insurance.

So before you purchase your car insurance policy and decide on your coverage make sure you understand what stacked and unstacked means and the pros and cons of stacked vs. unstacked insurance.

What is stacked insurance?

Stacked insurance revolves around underinsured motorist coverage and uninsured motorist coverage. It refers to increasing the limits of your uninsured and/or underinsured motorist coverage by stacking policies. Stacked car insurance increases your uninsured motorist and underinsured motorist coverage depending on the number of vehicles you own. It allows you to stack the limits for each vehicle, providing you a higher amount of coverage.

For instance, if you had two vehicles on your car insurance, you could stack the policies together to get higher coverage for both cars. This process of stacking insurance policies increases your claim limits, which, in turn, offers you greater protection.

Here's an example to see how stacked insurance would offer you additional protection.

Let's say you have uninsured motorist insurance coverage for two cars under a single policy, with a limit of $50,000 each. Currently, your coverage is unstacked. In the event of an accident, you'd be eligible to make claims up to the $50,000 limit. Any expenses above $50,000 wouldn't be covered by your car insurance.

With stacked insurance coverage, you'd combine your limits for both cars to have combined insurance coverage of $100,000 for both cars. Now in the event of an accident that causes $65,000 of damage, you wouldn't be left footing the bill for the $15,000 that exceeds the unstacked limit. Instead, your stacked insurance coverage would cover all the damage.

With stacked auto insurance, you can insure multiple vehicles under the same auto insurance policy and the limit of each vehicle's uninsured motorist coverage can be combined to create a higher composite limit. Stacked coverage can cost more, but the additional coverage might be helpful in certain situations. If you're involved in an accident with an uninsured motorist, it can be difficult to get compensation for bodily injury. Even if you are hit by a driver who has liability coverage, if they only carry the state’s minimum liability limits then you could still face issues.

What is unstacked insurance?

Unstacked insurance is having separate uninsured/underinsured motorist coverage limit for each vehicle on your policy, rather than combining them for one high limit. Almost all car insurance policies that have uninsured/underinsured motorist coverage are unstacked by default. Unstacked auto insurance applies your standard coverage limits to one specific vehicle, without combining the amounts.

In this scenario, you may have two cars on your policy and each of them have a $50,000 uninsured motorist limit. Any damage that exceeds that limit won't be covered by your auto insurance. Of course, if the damage is over a certain amount, you may also be eligible to sue an uninsured driver who is at-fault in an accident. The amount you spend in legal fees could take a significant amount out of your claim, though.

What does uninsured/underinsured motorist insurance cover?

Now that you have a sense for what stacked and unstacked insurance means, it's important to know what those limits actually protect you from. As we've mentioned, stacked and unstacked insurance refers to the limits of uninsured and underinsured motorist insurance.

This coverage protects you in the event you're hit by a driver who either doesn't have any car insurance or doesn't have enough car insurance coverage to cover your damages. It also comes into play in hit-and-run accidents and even can cover you as a pedestrian. When medical bills are especially high, this coverage can kick in to protect you. Some states require one or both of these coverages on auto insurance policies. Even if your state doesn't, you should still consider how much protection you want.

To learn more about uninsured/underinsured motorist coverage and if it’s required in your state, check out our blog on uninsured motorist coverage.

Stacked vs. Unstacked Car Insurance: Which should you get?

There's a few things to consider when deciding between whether to get stacked or unstacked car insurance. Here are some factors to keep in mind when making a decision:

State Laws and Company Policies

The first and probably the most important factor to consider is whether stacked insurance is even recognized in your state.

Some states limit the number of insurance policies that can be stacked while other states prohibit this all together. First and foremost, you'll need to check if you can stack insurance in your state. Some states require you to protect yourself against an underinsured driver or uninsured motorist in your auto policy. You can determine what amount is appropriate for you.

If you can, you'll need to see if your car insurance company will allow you to stack insurance. Note: not all companies do.

Insurance Cost

Because stacked insurance provides higher coverage limits and greater protection, it will cost you more than unstacked insurance. So if you opt for stacked insurance, you should expect slightly higher monthly premiums. Does stacked insurance fit into your monthly budget?

While you want to keep your insurance rates down, keep in mind that opting for low limits could lead to very expensive out of pocket costs in the event of a costly accident. If you're on the edge, an insurance agent can help you review your options and decide on an appropriate policy before you're involved in an accident.

Insurance Application Procedure

The procedure to stack insurance can be time-consuming. You'll need to fulfil some formalities and submit the required documentation to get the process underway. This procedure is ideal only when you have time to spare. If you need car insurance quickly, then you may want to opt for unstacked insurance.

Additionally, stacked policies need to be in the name of a single owner. If your spouse, children, and parents all drive your car, your policy may be ineffective if they need to use it someday. It's best to speak to your insurance provider before making a decision.

Need a new car insurance company? See which insurers other drivers recommend.

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