If you are thinking of buying or updating your auto insurance policy, you might have come across the terms stacked and unstacked insurance. But what exactly is the difference, and which option is the best? This article will break down both types of policies and the potential benefits and downsides of each so that you can make a more informed decision.
Stacked auto insurance
The purpose of a stacked auto insurance policy is to increase the maximum insurance payout you can receive in the case of an accident or collision with an uninsured (UM) or underinsured (UIM) motorist. Basically, with stacked insurance, you are less likely to have to pay out-of-pocket for a UM or UIM claim.
In 2021, about one in eight drivers on the road did not have proper auto insurance, which means that it is not unlikely you could end up needing uninsured motorist coverage. As such, stacked insurance combines the maximum coverage limits of each vehicle you own, which offers you greater protection in an accident with an insured motorist. However, keep in mind that stacked insurance only covers bodily injury, and can’t be applied to property damage or other kinds of damages caused by the accident.
There are also two different types of stacked insurance: vertical or horizontal. While they both combine the maximum insurance coverage on each vehicle you own, there is a small difference as outlined below.
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Vertically stacked auto insurance
If you decide to stack your auto insurance vertically, this means that your vehicles are stacked under the same policy. Let’s go over an example to illustrate this. If you have five vehicles that each have a UM/UIM coverage limit equal to $50,000, you could stack and combine each of the policies in the case of a claim with an uninsured motorist. This would mean that your maximum UM/UIM coverage is now a total of $250,000, instead of the $50,000 you would receive if your insurance policy just included the individual vehicle involved in the accident.
Horizontally stacked auto insurance
While similar, horizontally stacked auto insurance works slightly differently. Instead of being insured under the same policy, your vehicles may be registered under different policies and thus have separate UM/UIM coverage limits. However, you can still combine the coverage of each vehicle to increase your protection. For example, if you have one vehicle with $20,000 worth of UM/UIM coverage and another vehicle with $50,000, you could file a claim with an uninsured motorist worth up to $70,000.
It is also important to keep in mind that not all states or insurance companies allow drivers to purchase stacked auto insurance policies, and some states have extra stipulations for doing so. For instance, some states only allow insurance companies to offer horizontally stacked auto policies.
The following is a list of the 32 states that allow some type of auto insurance stacking, but states could change their laws at any time. You should also research if your state has additional rules or regulations you must abide by if purchasing stacked insurance.
| Alabama | New York (horizontally stacked only) |
| Arkansas | North Carolina (horizontally stacked only) |
| Colorado | Ohio |
| Delaware (horizontally stacked only) | Oklahoma (horizontally stacked only) |
| Florida | Oregon (horizontally stacked only) |
| Georgia (horizontally stacked only) | Pennsylvania |
| Hawaii | Rhode Island |
| Indiana | South Carolina |
| Kentucky | Tennessee (horizontally stacked only) |
| Mississippi | Texas (horizontally stacked only) |
| Missouri | Utah (horizontally stacked only) |
| Montana | Vermont |
| Nevada | Virginia |
| New Hampshire | West Virginia |
| New Jersey (horizontally stacked only) | Wisconsin |
| New Mexico | Wyoming |
Some other things to consider about stacked auto insurance are that: you must have at least two vehicles on a stacked insurance policy, and every vehicle on the policy must be registered under your name. While this can seem obvious, it can become more complicated if other family members share or drive the same vehicle, so it is important that you review the details of your stacked insurance policy with an insurance agent before purchasing it.
As well, your stacked auto insurance policy will not cover you if you are deemed at fault for the accident or collision. The claim only works if an uninsured motorist is considered responsible by the insurance company.
Stacked auto insurance policies will also require a higher monthly premium than an unstacked policy because you will receive more coverage. However, in some states, the premium difference between the two types of policies is quite small.
In summary, stacked auto insurance could be a great option for you if:
- You have at least two vehicles
- The state you live in and the insurance company you have allows stacking
- The area you live in has many uninsured motorists
Unstacked auto insurance
As you might now expect, unstacked auto insurance means that the coverage limits of your different vehicles are not combined in the case of an uninsured motorist claim.
If you have unstacked auto insurance, this generally implies each of your vehicles has a separate insurance policy, but you can still combine vehicles under the same policy while having unstacked insurance. Some people purposefully choose this option to save on their monthly premiums. However, the risk is that if you are involved in an accident with an uninsured motorist, you might have to pay more for out-of-pocket expenses.
An example of an unstacked auto insurance policy looks like this: if your vehicle’s maximum for UM/UIM coverage is $40,000, that is the maximum amount the insurance policy will let you collect, no matter the severity of the accident or your injuries. If you had stacked auto insurance, the coverage limits of your other vehicles would be added to the total, providing you with more overall coverage at the expense of a slightly higher monthly premium.
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Stacked vs unstacked auto insurance at a glance
This chart provides a brief overview of the potential benefits and downsides of both stacked and unstacked auto insurance:
| Stacked auto insurance | Unstacked auto insurance |
| Provides more coverage | Provides regular coverage |
| More expensive monthly premiums | Less expensive monthly premiums |
| May not be available in your state | Available in every state |
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Talk to your insurance broker to help decide which option is right for you
There are pros and cons to both stacked and unstacked auto insurance, so the decision might not be very straightforward. In this case, and if your state and insurance company offers the possibility of stacked insurance, speak to your insurance broker. They can go over each option with you in detail and compare the best policies to ensure that you purchase the auto insurance policy that is right for you.
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