If you drive a car in Colorado, you should be aware of the state’s requirement that you carry minimum automobile insurance coverages in the amount of $25,000 per person for bodily injury, $50 per accident, and $15,000 for property damage. But you may not know that uninsured and underinsured motorist coverage is optional, and the requirements allow for stacking.

What is Stacking?

Stacking is a term of art commonly used in the automobile insurance industry. It basically means that uninsured and underinsured motorist coverage limits will stack, or increase, according to how many vehicles you insure. Uninsured (UM) and Underinsured (UIM) coverages help pay for accident-related bills when you’re hit by a driver with no insurance, cheap PLPD insurance, or insurance that is not sufficient to cover the damage.

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Prior to 2008, companies selling automobile insurance in Colorado could:

  • Offset the amount paid by the at-fault driver’s insurance company against the amount available under the injured party’s own uninsured motorist coverage
  • Include “anti-stacking” language in their UM coverages to prevent insureds from receiving the full benefits they thought they were buying when they purchased UM or UIM coverage in the state
  • Prevent policyholders who had paid for multiple policies on multiple cars in the same household from adding the UM coverage on each separate policy together to maximize coverage in the event of an accident with an uninsured or underinsured motorist

On January 1, 2008, Colorado passed Colorado Revised Statute 10-4-609, which effectively closed those loopholes by allowing a policyholder to obtain more coverage in the event of an accident caused by an uninsured or underinsured driver — commonly called stacking. Colorado allows stacking across policies, meaning that if you’re hit by an uninsured or underinsured driver and you have two separate insurance policies, you’ll be able to file a claim under both policies if needed (as long as they are both in your name), giving you extra money to work with if the costs of your injury exceed one policy’s limit.

Unstacked vs. Stacked

Unstacked coverage treats each vehicle’s coverage separately, no matter how many cars are insured by the same policyholder. If you’re in an accident with an uninsured or underinsured driver, an unstacked policy will cover expenses up to the uninsured/underinsured motorist bodily injury (UMBI) limit chosen for only the vehicle involved in the crash. So although you might pay a lower premium for unstacked coverage, you’re taking the chance that your UMBI might be too low to cover all your accident-related expenses if you’re in a serious accident.

Stacking might actually save you money in premiums, since no matter how many cars you have on a policy, the amount of coverage for each car stays the same, whereas if you were to increase the coverage level for each vehicle to the amount the stacked coverage would be, it would probably be more expensive, and definitely more complicated.

Image by Austin Kirk

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