Stacked vs. Unstacked Car Insurance

Stacking your car insurance is an easy way to increase your protection from an accident caused by an uninsured or underinsured driver. However, doing so comes with a price. If you live in a state that allows it, here’s what you need to know about stacked vs. unstacked insurance.

What is stacking my car insurance?

Stacking is a way to increase the overall coverage on your car insurance by combining the limits you have for each car.

In the 32 states where it is allowed, you can only stack the bodily injury (BI) limits for your uninsured and underinsured motorist coverage, which are sold separately in some states and together in others.

As an example, if the BI limits for your uninsured/underinsured motorist coverage are $25,000 per person and $50,000 per accident and you have two cars, your “stacked” coverage limits are $50,000/$100,000.

The process of combining uninsured/underinsured motorist coverage for multiple cars on the same policy is sometimes called vertical stacking. Horizontal stacking is when you combine coverages for cars insured on separate policies.

In general, stacked policies are more expensive than unstacked ones, because they require insurance companies to pay more on certain claims.

The restrictions on stacking vary between the different states that allow it. For example:

• In some states, your coverage is automatically stacked, unless you sign a request to unstack your policies.
• In 10 states, you can only stack coverage for vehicles covered by separate policies. This can often apply to a car you co-own with a family member who insures the vehicle on their own policy. In some states, family members residing in the same home can stack coverage on different policies, regardless of ownership.
• Some states that allow stacking don’t require all insurance companies to offer it.

What are the advantages of stacked vs. unstacked insurance?

The greatest advantage of stacked coverage is that it provides a reasonably economical way to increase the overall BI limits on your uninsured/underinsured motorist coverage. The biggest advantage of unstacked coverage is that it costs less than a stacked policy.

With unstacked coverage, your uninsured/underinsured motorist coverage cannot exceed your bodily injury liability limits.

In this situation, the only way to increase your uninsured/underinsured BI limits is to increase your policy’s BI liability limits. However, it’s usually cheaper to stack your coverage than it is to raise your BI limits for both liability and uninsured/underinsured coverage.

For example, if you choose BI liability limits of $50,000/$100,000 for an unstacked three-car policy, the highest uninsured/underinsured BI limits you can get are also $50,000/$100,000.

If you stack your coverage on a policy with the same liability limits for bodily injury, you can get uninsured/underinsured motorist BI limits up to $150,000/$300,000.

On an unstacked policy, the only way to bring your uninsured/underinsured motorist BI limits up to $150,000/$300/000 is to increase your BI liability limits to these amounts, too.

How much does it cost to stack car insurance?

The cost to stack your car insurance coverage varies by state, insurance company and your personal rate factors.

In an analysis of Florida car insurance rates, QuoteWizard found that stacking coverage increased the monthly rates on a two-car policy from about $10 to $45, depending on the carrier. Overall, our research showed that stacked policies cost $36 more a month, on average, than unstacked policies in Florida.

If you have multiple cars and live in a state that allows stacking, ask your agent for quotes comparing stacked and unstacked coverage when you shop or renew.

Why are my uninsured/underinsured motorist limits important?

The high costs of medical treatment and the high rate of underinsured drivers make it important to have adequate limits for your uninsured/underinsured motorist coverage, which is required in 19 states and optional in most others.

Almost every state does require BI liability, which normally covers your medical treatment if you are injured in a crash caused by somebody else. However, the nonprofit Insurance Research Council estimates that 12.6% of drivers across the country are uninsured.

Among those who are insured, many only carry their state’s minimum requirements. Unfortunately, the minimum requirements in most states often come up short for injuries that require emergency medical treatment and/or prolonged treatment, therapy and lost wages.

Personal injury protection (PIP), medical payments coverage (MedPay) and personal health insurance also cover injuries you and your passengers suffer in a car accident. However, each has limitations. For example:

• PIP and MedPay often come with limits of $10,000 or less, depending on your state and carrier.
• Out-of-pocket costs for health insurance deductibles and copayments can add up fast.
• If you or any injured passengers require prolonged rehabilitation, the combined benefits of PIP, MedPay and/or health insurance may only cover a fraction of your combined medical expenses and lost wages.

If the person who causes your injuries does not have insurance, or has liability limits that don’t cover all your expenses, uninsured/underinsured motorist coverage can potentially make up the difference.

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