Stacked vs. Unstacked Auto Insurance

Any driver can buy car insurance when you want to be protected against collisions, but even though insurance is required, some drivers still neglect to buy it.  If you are involved in an accident with a motorist who has inadequate insurance, you may be in need of an uninsured (UM) or underinsured motorists (UIM) coverage.
These type of policies will pay for your medical and/or repair bills if the other driver’s insurance is not adequate. However, the limits on this coverage will depend on whether you have a stacked or an unstacked plan.

What’s the Difference?

Stacking your coverage means that you increase your level of UM/UIM coverage when you have more than one vehicle. Many drivers find that it doubles or triples their limits. When the need arises, they can potentially combine their stacked policies to make a bigger claim.

Unstacked insurance coverage, on the other hand, treats each vehicle’s coverage separately, no matter how many cars you insure.

Advantages of Stacked Cover

When a crash involving an under or uninsured driver takes place, the standard coverage cap may prove inadequate. For example, a $25,000 uninsured motorist policy will likely not supply enough money to fund hospital treatments for a seriously injured driver and multiple passengers. If you buy stacked policies on two cars, this cap increases to $50,000. A third vehicle would add another $25,000. Underinsured coverage limits also rise accordingly.

Advantages of Unstacked

The only major advantage of unstacked insurance is that it costs somewhat less. Insurers must charge significantly more to provide two, three, or even four times as much coverage. Nonetheless, it’s worth taking the time to ask an insurance agent about the difference in price. It varies considerably from one region or insurer to the next. You may find that stacking’s extra expense is easy to afford.
Both stacked and unstacked policies cover the same types of accidents and costs. Regardless of what insurance you choose, the caps reset when a new crash occurs. Any uninsured motorist policy with a $50,000 limit will pay up to $50,000 in costs associated with each separate collision.

Value of Protection

Only approximately 13 percent of U.S. motorists don’t have liability coverage. This means that you’re not particularly likely to suffer a collision with an uninsured driver. It might make more sense to spend the extra cash on comprehensive insurance or better health coverage.
Nevertheless, uninsured motorists remain much more common in some states than others, and the above-mentioned statistic doesn’t include underinsured drivers.
You should think about several different factors when comparing stacked vs. unstacked auto insurance. Such considerations include how often you drive, how much disposable income you have, your state’s laws and its percentage of uninsured motorists. Stacked coverage holds greater value in states like Florida and Oklahoma, where more than one-fifth of the drivers lack insurance.

Only One Option?

If you own a single vehicle or live in a state that doesn’t allow stacking, an unstacked policy is your sole choice. Slightly more than half of U.S. states permit stacked coverage. Specific rules on stacking also vary; they’re more restrictive in places like Oregon and Kentucky. Experienced insurance agents will be able to provide further details, so it’s always a good idea to talk to a professional about your options.

Types of Auto Insurance Policies To Consider

When it comes to auto insurance, it’s ultimately your responsibility to ensure you are protected at all time. There are several types of insurance policies to consider when you own or lease a vehicle. Always keep in mind that one policy may not be enough to cover all your specific needs. You may be required to look at an additional policy to avoid any major financial setbacks.

Here’s an easy list of the top policies you absolutely have to consider when you own a vehicle:

Liability Insurance

Liability insurance is a standard element of most auto insurance policies. This policy is a legal requirement in all states and will protect the driver of a vehicle in the event of any damage or injury they may have caused. This policy will protect the insured party when he or she ends up in a lawsuit arising from claims and will have to foot the medical bills or repair costs owed to a third party.

Personal Injury Protection (PIP)

Even though this is not a requirement in most states, it is still highly recommended that drivers have PIP.  Should you ever be involved in an accident, the insured party can collect maximum benefits like medical bills and loss of income. PIP will pay out whether the accident was the fault of the policyholder or not.

Underinsured and Uninsured Motorist Cover

Roughly 1 in every 8 drivers not insured. Should you ever be involved in an accident with a driver who caused the accident and they are also uninsured, this type of policy will have you covered.  UM and UIM will pay for your medical bills when the other driver has no insurance, or their insurance does not have adequate liability coverage to pay for your medical bills.

Collision Coverage

Collision coverage will pay for damages caused by an accident with another vehicle, or objects such as trees, street lights, telephone poles, or guard rails. Although it is not a requirement in most states, this type of coverage will still be required by your lender.

Comprehensive Cover

Should your vehicle be damaged by a collision, natural disasters, theft, or vandalism, you will be protected under comprehensive insurance cover. Comprehensive cover is not required in all states but it may be required by your lender. It might not make sense, however, if you have an older vehicle because the premiums and deductibles may not make financial sense. Always do your research from reputable sources such as online banking information guide.

Towing and Roadside Assistance

This type of coverage can come in very handy when you have an emergency breakdown. This policy will help you to get some roadside assistance alongside the cost of towing in the vehicle and rental of a new vehicle. It does have its limits, however, and it will not cover for any replacement parts.

GAP Cover

As soon as you drive your new vehicle out of the lot, it loses value. This means that there’s a period where the value of the car is less than the actual loan amount. If you are in an accident during this period, GAP cover will pay out the difference between the actual value of the vehicle versus the total loan amount still outstanding.