When it comes to auto insurance many people tend to struggle on what to go for. In this blog we have highlited the two types of auto insurance and their pros and cons for you to choose from. There are two types of auto insurance which are stacked auto insurance and unstacked auto insurance. When it comes to stacked auto insurance it has certain benefits while unstacked auto insurance does not give certain benefits. There are several difference between stacked and unstacked auto insurance. Let us see below their differences and what to choose which will work best for you.
Stacked Insurance
Stacked insurance covers both physical coverage limit of uninsured and underinsured auto coverage. This insurance applies to uninsured and underinsured based on respective policies.
Stacked insurance has privileges because when you're involved in an accident when you're covered under uninsured and underinsured you are likely to obtain a higher liability. This means you're spent very little expense when you stack insurance. This auto insurance is combining coverage limits for several vehicles.
So what is a coverage limit? A coverage limit is the maximum amount of money your insurance company pays for a claim. So, when you're in an accident under uninsured and underinsured stacking insurance will provide more protection.
Stacking insurance has some drawbacks. First, is more expensive than unstacked auto insurance. It is also not always permitted by the state of law. Stacked insurance also offers a higher payout therefore it is a wise choice to go for it especially if you reside in a state with a high rate of uninsured drivers.
Difference between stacked and unstacked auto insurance
There are major differences between stacked and unstacked auto insurance. Let's begin elaborating more on stacked insurance.
In the context of auto insurance when we say uninsured motorist coverage it means combining the limits offered by various insured vehicles.
When your name is under one with several vehicles policy it increases your coverage when in stacking insurance. It is therefore advisable to stack coverage limits of two cars under one policy. Another advantage is that when your name is on another family member's policy you can get an added coverage from this.
Unstacked Insurance
Unlike stacked insurance, unstacked insurance has some limitations when it comes to the use of bodily injury coverage provided by an uninsured motorist to the bodily injury limits of the involved vehicle.
Thefore when you only have unstacked insurance your protection policy is high as that of the vehicle's limits.
Auto insurance stacking can be broken down into two categories. There are two types of auto insurance stacking, these are Vertical stacking and Hoizontal stacking.
Let's look at these two auto insurance stacking including their benefits and differences.
Vertical Stacking
Vertical stacking is also known as intra-policy stacking insurance. It's combining coverage for two or more vehicles insured under the same policy.
Horizontal Stacking
Is also known as inter-policy stacking. This is whereby you can combine protection for several vehicles covered by various policies. This falls into fraud category when the same claim is presented to two different insurers. Usually only policies under a single company are normally allowed to be stacked.
Let's look at it in a broad way, when your name is listed in a family member's policy with $20,000 coverage and at the same time your coverage limit for uninsured motorist bodily injury coverage from your auto policy is $35,000. When you're involved in an accident with uninsured driver you combine this two coverage and get $55,000 instead of one payment.
What Is The Process of Stacking?
Different States have different rules when it comes to stacking. It is always advisable to check the rules of state in terms of stacking.
There are states that may permit stacking while others prohibit it. You can stack your insurance on either a single auto insurance policy which can cover for several vehicles. Or you can stack your insurance across various auto policies in your name.
What are the Coverage for Both the Uninsured and Underinsured Drivers?
In the event whereby you are involved in an accident with someone who is not covered by any insurance, uninsured motorist coverage will assist in coverings for your costs. Wheres when the driver at the wrong is unable to cover your liabilities underinsured motorist coverage covers your costs.
Both uninsured and underinsured will cover for medical cost if you're involved in an accident with a driver who is not covered by the insurance company. Also depending on the rules of different states when in an accident with uninsured driver and there are damages of property, underinsured and uninsured property damage coverages will help in payment of repairs. Always bare in mind that stacking only applies to coverages of bodily injury.
Advantages and Disadvantages of Stacked Insurance
Just like any other thing, stacking insurance has it's ups and downs. First, let's begin with the pros of stacking.
Car accident related costs can be sometimes really expensive, with stacking your protection costs can be increased.
You can be able to combine several vehicles and pay less because of this. We see this as a good way to avoid paying more.
Advantages and Disadvantages of Unstacked Insurance
When you're in unstacked premium the cost is less expensive than stacked insurance because when one adds additional insurance policies it raises the limit. With this type of insurance when involved in an accident, you might be required to pay for more than stacked insurance. So if you don't want to oat for more in case of an accident, go for stacked insurance and you'll avoid more charges.
Conclusion
Always go for what works best for you. Do a thorough research on the different auto insurance to find out which one will work best for you before signing up to avoid future disappointment. With these few remarks you can now understand what's best for you when you want to choose between unstacked and stacked insurance. Good luck in choosing what works for you.
