Pennsylvania is one of very few states that offer the option of having stacked or unstacked coverage on an auto insurance policy. However, not many people understand the difference between the two. This article will help you understand how stacked auto insurance coverage works, and answer other questions you may have.
Who does Stacked coverage apply to?
Stacked coverage applies to anyone with a PA auto insurance policy that has more than one vehicle insured on that policy.
What coverage does having the Stacked option refer to?
Stacked insurance applies to Uninsured and Under-Insured Motorist Bodily Injury Coverage. Uninsured Motorist coverage (UMBI) applies when you are hit and injured by a driver that is not carrying auto insurance like they’re supposed to have. Under-Insured Motorist coverage (UIMBI) applies when you are hit and injured by a driver that has auto insurance, but is not carrying enough liability coverage to pay for all of your injuries. UMBI is important coverage to have because 1 in every 6 drivers are driving uninsured. UIMBI coverage is just as important because out of the drivers that do have auto insurance, many of them carry very low levels of liability coverage.
How does Stacked coverage work?
If you choose the Stacked option on your auto insurance policy, the amount of UMBI & UIMBI coverage that you selected is multiplied by the number of vehicles you have insured.
Example: Let’s say you chose a level of 100/300 for UMBI & UIMBI coverage (100/300 is represented in 1000’s), and you selected the Stacked option…..
Wouldn’t I come out the same if I simply chose the Un-stacked option, and multiplied the initial level of coverage by my number of insured vehicles?
No. For three reasons:
1. Dollar for dollar, it usually comes out significantly cheaper to go with the Stacked option than going with the Un-stacked option and multiplying initial levels of coverage…. With some companies, it comes out a lot cheaper.
2. Remember that you are limited on the initial level of UMBI & UIMBI coverage that you choose. By law, you cannot select a higher initial level of UMBI or UIMBI coverage than the level you selected for Liability bodily injury coverage. So if you only selected 100/300 for your Liability bodily injury coverage, that’s as high as you can choose for your initial levels of UMBI & UIMBI coverage. So increasing UMBI & UIMBI levels would mean you would have to simultaneously increase your liability coverage.
3. Many auto insurance companies won’t offer high enough levels of liability and/or UMBI & UIMBI coverage to get you up to the level that the stacked option can… The more vehicles you have insured, the more likely this is true.
I only own one vehicle now, but plan on buying a 2nd vehicle soon. Will I be able to change my status to Stacked once I buy a second vehicle?
Certainly. With a simple 3 minute phone call to your agent, it is very easy to both add a vehicle and update your status to stacked on your auto policy. It's very easy to switch back and forth at any time.
For those of you who have multiple vehicles insured on an auto policy, selecting the stacked option is a great idea! The cost is usually very low, and it’s well worth multiplying your levels of UMBI and UIMBI coverage. The percentage of drivers that drive uninsured and under-insured have become a serious risk to other drivers… Stacking is a very cost effective way to lower that risk.
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Dan Lyles is an Independent Insurance Agent serving Ohio, Indiana, Michigan, Pennsylvania, Virginia and West Virginia..