How Doing So Can Pay Off in the Event of an Auto Accident with an UM/UIM Motorist
When you’re injured in a Colorado auto accident, having enough car insurance coverage suddenly becomes extremely important. If you are in an accident with an uninsured or an underinsured motorist, this is especially true since he or she likely doesn’t have enough coverage to pay for all your medical expenses and property damage.
Unstacked and Stacked Insurance Policies
Stacking is a term used by auto insurance companies to describe the process of allowing uninsured and underinsured motorists (UM/UIM) coverage limits to stack, or multiply, according to the number of vehicles insured. Car insurance is regulated at the state level, and thirty states currently have laws or previous cases decided in court that allow stacking of coverage, although some states permit insurance companies to include policy language that stops their insureds from stacking UM/UIM coverage.
In 2008, the Colorado legislature passed a law allowing stacking across insurance policies, which means that if you’re in an accident with an uninsured or underinsured driver and you have two separate insurance policies, you’re allowed to file a claim under both policies as long as they are both in your name. If you own a vehicle insurance policy that insures two or more vehicles with UM/UIM coverage and you’re hit by an uninsured or underinsured driver, can you collect the limits of UM/UIM coverage under as many vehicles as necessary to receive full compensation for your damages.
Before this legislation was passed, insurers selling policies in Colorado could include anti-stacking language in their UM/UIM coverage, offset the amount paid by the liable driver’s insurance company against their insured’s own UM/UIM coverage, and prohibit those who had bought multiple policies on multiple vehicles from adding UM/UIM coverage on separate policies together in the event of an accident with an uninsured or underinsured motorist.
The Advantages and Disadvantages of Stacking Coverage
While an unstacked policy will only cover expenses up to the uninsured/underinsured motorist bodily injury (UMBI) limits of the vehicle involved in the crash, which in the case of a particularly serious accident, might be too low to pay for all the expenses, “stacking” your own uninsured/underinsured (UM/UIM) coverage can get you extra money to cover the costs. Stacking can also lower the amount of money you pay for insurance premiums since no matter how many vehicles you have insured on a policy, the coverage for each remains the same.
Increasing the level of coverage for each vehicle separately would likely be more costly than stacking, although a Bankrate report stated that according to the Property Casualty Insurance Association of America (PCIAA), the average UM/UIM cost runs an estimated 37.3 percent higher in stacking states than in nonstacking states. This, in turn, increases the cost of car insurance, raises the risk of being hit by an uninsured or underinsured motorist, and is the reason the PCIAA and other insurance groups continue to lobby against stacking.
If you have questions about whether or not you can stack your UM/UIM coverage, have your insurance agent explain your policy and based on that information, decide whether or not it would benefit you financially if you get into a collision with an uninsured or underinsured driver.