If you’re confused by the various car insurance options available, you are far from alone. Just trying to comprehend the precise car insurance terms can seem like trying to learn another language. It can feel daunting to try to pick the right policy and understand your options regarding uninsured and underinsured motorist (UM/UIM) policies.
You may have heard of the terms stacked and unstacked policy in passing, but until you are in a severe accident with an at-fault, uninsured driver, you may not know what those terms mean when it comes to coverage and financial protection.
At The Wilhite Law Firm, we aim to pull back the curtain on the intricacies of car insurance policies and give you the facts you need to make smart coverage choices. If you have been seriously injured in an accident with an uninsured driver and need help getting the compensation you’re owed, contact us today to speak with one of our top-rated Denver, Colorado car accident lawyers.
Unstacked and Stacked Insurance Policies
If you’ve been in a car accident and are in the process of filing a claim, you may have come across references to “stacked” and “unstacked” insurance. These terms can be confusing. Since stacking does not apply in all 50 states, many people are unaware of what these terms mean and how the concepts can be applied to their accident claims.
Stacked insurance is something that generally only applies to accidents with uninsured or underinsured motorists. Stacking insurance coverage is a way for a driver to combine coverage limits on uninsured and underinsured policies for multiple vehicles. By combining separate coverages into one higher limit, a driver can benefit from greater financial protection.
Stacking can take place on a single care insurance policy that insures two or more vehicles, and stacking can also take place across two or more separate car insurance policies, as long as those policies are in your name.
To understand stacking, you need to brush up on the basics of uninsured and underinsured insurance policies because companies offer several different types of coverage. Uninsured motorist coverage (UM) will help cover your losses if you’re injured in an accident caused by a driver who doesn’t have liability insurance. Underinsured motorist coverage (UIM) will help cover your losses if the driver who hit you doesn’t have enough coverage to pay for all your losses.
There are two types of UM/UIM coverage. One is for bodily injury, which covers your medical expenses. The other is for property damage, which covers the repair or replacement of your vehicle after a crash.
Stacking coverage means that you may be able to combine coverage limits on the bodily injury portions of multiple policies. It is typically not possible to stack property damage coverage limits across policies.
How Does Stacking Work?
Colorado requires all automobile owners to carry liability insurance. The minimum amount of coverage allowed by state law is as follows:
- $25,000 for bodily injury or death to any one person in an accident
- $50,000 for bodily injury or death to all individuals in an accident
- $15,000 for property damage in any one accident
Imagine that you carry the minimum amount of liability coverage legally required on two vehicles in your household. That would be $25,000 for bodily injury per person on each car. If you stacked coverage on your policy, you could increase your uninsured motorist limit to $50,000 per person for one accident.
If one of your vehicles was hit by an at-fault driver without insurance, that means that your insurer would pay your medical expenses up to $50,000 instead of $25,000.
Is Stacking Coverage Permitted in Colorado?
Yes, Colorado law does allow stacking for UM and UIM insurance policies. However, the law also gives insurers some flexibility with how they set up the provision limits.
If you are interested in stacking coverages, you need to check with your specific insurance provider to find out which policies can be stacked and if policies can be stacked across different companies. A knowledgeable car accident attorney can help you review your insurance options to determine the full coverage that is available to you.
The Advantages and Disadvantages of Stacking Coverage
There are some distinct advantages and disadvantages to stacking UM and UIM coverage. If you are considering whether stacking is the right option for you, consider all the pros and cons and review your insurance policy to make sure stacking is allowed and consider how it could work in your favor.
Advantages to Stacking
Stacking allows you to increase your coverage limits by including the coverage on multiple vehicles. If you carry the minimum UM coverage of $25,000 for any one person injured and get into a serious accident, that money may not cover all of your medical expenses. You may end up paying out of pocket for a significant portion of your medical costs.
Stacking two $25,000 policies means that you could have $50,000 in coverage, instead, which will go much further toward paying down your medical expenses.
Disadvantages to Stacking
Stacking, in essence, gives you a greater amount of financial protection in the event of an accident with an uninsured or underinsured motorist. However, with greater financial protection can come greater financial costs in the form of higher monthly insurance premiums.
Depending on your insurer, generally, stacked insurance policies carry higher coverage premiums. So, while the company will pay more in the event of an accident with an uninsured at-fault driver, you are paying them more per billing cycle.
It is also important to keep in mind that if you have stacked coverage, you must prove that the other driver was responsible for causing the accident. You are generally unable to receive any compensation under your stacked policy unless another driver was to blame for causing your injuries.
How an Unstacked Policy Can Help After a Car Crash in Colorado
Unstacked policies still offer drivers a measure of reassurance that, if they are involved in an accident with an at-fault uninsured or underinsured driver, they will be able to recover at least some form of compensation for their injuries and property damage. Unstacked policies also offer drivers lower premiums and may help them save money in the long run.
Depending on your insurance provider, your stacking options may also be somewhat limited. You may be able to opt for simply increasing your UM or UIM coverage for a slight rise in your premiums instead of opting into a fully stacked and potentially more expensive option.
Also, remember that keeping a minimum amount of coverage is required by state law. Carrying even an unstacked policy offers you some financial protection and safeguards you from legal consequences.
Our Colorado Car Accident Lawyers Are Ready to Answer Your Insurance Questions
Stacked and unstacked policies can get complicated, especially if you have different policies with different insurers spread across multiple vehicles. If you have questions following an accident with an uninsured or underinsured driver, contact the legal team at The Wilhite Law Firm for help.
We can answer your insurance policy questions and help you seek the maximum amount of compensation possible for your medical expenses. Reach out to us today for more information.
