When it comes to insurance, there are a lot of terms and concepts that are confusing and often misunderstood.  It can be overwhelming to try and figure out what they all mean when you’re looking at your policies.  Here at Blue Marsh Insurance, one of our top priorities is helping to educate our customers about their insurance and make it less intimidating.

One concept that I know I did not understand until I started working in insurance is the difference between stacked and unstacked limits for uninsured and underinsured motorist coverage.  To start, uninsured and underinsured motorist coverage (often abbreviated as UM UIM) is part of your auto policy.  It is offered for each vehicle listed on your policy, and it provides coverage when you are involved in an accident with someone who either, (1) doesn’t have insurance or (2) doesn’t have enough insurance to cover the damage caused by the accident.  

The dollar limits for UM UIM coverage can either be split or a combined single limit.  Split limits set a limit on how much can be paid out for each person involved in the accident and how much can be paid out in total per accident.  A combined single limit is just a total limit per accident; it eliminates the limit on each person and allows the money to be distributed as needed between the people involved in the accident.  For example, you could have split limits that provide $100,000 per person and $300,000 per accident or a combined single limit of $300,000 total per accident.

This is where the stacking or unstacking of limits comes in.  If you only have one vehicle, you automatically have unstacked limits.  If you have more than one vehicle, you then have the option to stack the limits or leave them unstacked.  With unstacked limits, your UM UIM limits are fixed for each vehicle.  So, if you have 3 cars on your policy with $100,000/$300,000 unstacked limits and you’re involved in an accident with someone who doesn’t have insurance, you will have $100,000 of coverage per person and $300,000 total coverage for the accident.  If you choose to stack your limits, the limits for each of your vehicles will be added together to create a larger pool of coverage.  For example, if you have 3 cars on your policy with $100,000/$300,000 stacked UM UIM limits, you will actually have $300,000 worth of coverage per person and $900,000 worth of coverage per accident.

To sum up, unstacked UM UIM limits provide a fixed amount of coverage per vehicle on your policy, while stacked limits combine the limits on each vehicle into one large pool of coverage.  Hopefully this can help to clear up the difference between stacked and unstacked UM UIM limits and can help you better understand your auto insurance policy.  Finally, remember to always ask your agent if you have any questions about the terms and coverages in your policies.

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