AUTOMOBILE INSURANCE COVERAGE SERIES – Part 2 Buying Auto Insurance? Make good decisions on stacking! By: Matthew J. Bilker, Esquire

March 26, 2020

With mandatory “shelter-in-place” orders affecting the better part of the five-county region, we are all looking for projects to do around the home that we have put off for ages and other ways to save some money.  Now is as good of a time as any to take a look at your automobile insurance coverages!

Everyone is looking at options aimed at cutting expenses right now – but make sure you are being smart! Be careful about making decisions that could impact you and your family’s well-being to save a little bit on premiums now.

Amongst the decisions you are asked to make when you are buying auto insurance, or changing your auto insurance coverages, is whether or not to elect what is known as “stacking” with regard to your uninsured/underinsured (UM/UIM) motorist coverage.

A refresher – if a consumer is negligent and causes an accident where someone else sustains injuries, that consumer’s auto insurer will indemnify him for damages that the injured individual sustains up to the consumer’s choice of bodily injury liability limits.

However, if you are injured by a consumer whose bodily injury liability limits do not fully compensate you for the injuries you sustained, you can protect yourself by elected uninsured/underinsured motorist benefits.  These benefits protect you in the event that you are injured in a motor vehicle collision and the person who hit you either (i) does not have enough liability insurance, or (ii) does not have adequate liability insurance to cover the losses and damages you sustained in the accident. In Pennsylvania, this acts as “excess” insurance.

If you elect to “stack” your vehicles, your UM/UIM coverages are multiplied by the number of vehicles you have insured on your policy.

As an example, if you elected UM/UIM benefits of $100,000 per person, and you have three vehicles on a “stacked” UIM policy, then you effectively have purchased $300,000 in excess liability coverage.  Thus, if you are injured by an underinsured person who only maintained $15,000 in bodily injury liability coverage, an excess policy of $100,000 without stacking means you have a total “pot” of $115,000. However, in this example, if you had chosen to elect stacking, you would have $315,000 in total coverage.

That sounds like a lot of money, but for people who sustain spinal injuries requiring surgery that is made necessary as a result of an auto accident that isn’t their fault, that excess coverage is certainly worth it.

Even better – stacking coverages is relatively inexpensive compared to the other coverages you are purchasing.

Whether you are purchasing your automobile insurance online, or speaking with a sales representative or broker, do not let them talk you into rejecting stacking of uninsured/underinsured motorist coverage.  

For more information, call the legal team at Eckell Sparks at 610-565-3701 or contact us online.