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Stacked vs. Unstacked Insurance: Differences and Tips

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Learn about the concepts of stacked versus unstacked insurance and some factors to consider before you choose an insurance policy.

If you’re ever involved in an auto accident, the costs can add up. Factor in the damage to your vehicle, medical expenses, and wages lost because of disability or treatments, and you can expect an overall bill of several thousand dollars in even some of the more optimistic scenarios. The price can be even higher if the accident involves an uninsured or underinsured motorist. Stacking your insurance is one way that you can help to mitigate such a scenario. Read on to discover what stacked insurance entails and how you can use it to your benefit.

What Is Stacked Insurance?

Stacked insurance refers to a practice relating to uninsured and underinsured motorist coverage for policyholders who own and insure more than one vehicle. These are types of auto liability coverage that help pay for your expenses if you ever get into an accident with a driver who lacks the appropriate insurance. For both types, there are two subcategories of coverage:

  • Bodily injury coverage relates to expenses associated with injury.
  • Property damage coverage goes toward the repair or replacement of property, such as your vehicle, home, or other belongings involved in the accident.

When you stack your insurance, you combine the coverage limits for all of your vehicles, specifically with regard to bodily injury. A coverage limit is a threshold for how much your insurance company will pay for a claim covered by your policy. Therefore, stacking your various coverage limits can help you maximize your coverage and minimize your financial risk if you get into an accident with a motorist who lacks the appropriate insurance.

Imagine, for example, that you stack the coverage limits of two uninsured motorist policies. Should an uninsured driver collide with you, you can essentially use both limits to cover the expenses associated with the accident. The clearest advantage of this is that you set yourself up to put less of your own money toward a claim. However, the practice comes with the downside of having to pay more for your monthly premium.

Most states allow policyholders to stack their auto insurance coverage, although some require stipulations and others may not require insurance companies to offer the option.

What Is Unstacked Insurance?

With unstacked insurance, there’s no combination of coverage limits. Rather, your uninsured and underinsured motorist coverage amount to ordinary insurance policies. The declarations page of your policy tells you exactly what it covers and to what monetary limit.

Because it refers to ordinary auto insurance, unstacked insurance is available in all 50 states. However, even in areas where you can combine coverage limits, unstacked insurance would be your only option if you own and insure only one vehicle. Additionally, you may prefer to keep your insurance unstacked so that you can pay a lower premium.

Unstacked insurance presents the risk of your having to pay more out of pocket in the event of an accident. If the accident ends up costing you $60,000 but your policy only covers up to $50,000, then you’d have to use $10,000 of your own money to cover the full expenses. Had you stacked two identical coverage limits, you could’ve taken from the second policy to resolve the remaining expenses, resulting in no out-of-pocket expenses at all.

Stacked vs. Unstacked Insurance: Which One Should You Choose?

If you own multiple vehicles and live in a state that allows stacking, you may be wondering whether stacked insurance is the right choice for you. The main factor to consider before making your choice is how likely you are to get into an accident with an uninsured or underinsured driver. According to a 2021 study performed by the Insurance Research Council, one in eight motorists in the United States drives without insurance. The rates of uninsured motorists also vary from state to state, ranging from a low 3.1% in New Jersey to a very high 29.4% in Mississippi.

Keep such statistics in mind to guide your decision. Both New Jersey and Mississippi, for example, allow stacking, but stacked insurance would likely be a wiser investment in the latter than in the former. If your state has similarly high rates of uninsured motorists, consider stacking your coverage limits to protect yourself from high out-of-pocket costs.

How To Stack Your Insurance

After considering the matter and deciding that stacked insurance is the right choice for you, you may have an additional decision to make: stack your insurance either on a single insurance policy or across multiple policies.

When you stack on a single policy, it covers multiple vehicles. Essentially, you’re placing additional coverage limits on your insurance agreement. For example, you could have three cars with coverage limits of $30,000 on each of them under just one uninsured motorist policy. That means that in a single accident, you’d have the protection of all three coverage limits put together. Therefore, if your medical bills total $80,000, you’d pay nothing out-of-pocket since your total limit is $90,000.

Stacking across multiple policies is more like connecting them so that you can integrate their protection. Picture a policyholder who owns and insures three cars. One car belongs to them, while the other two belong to members of their family, and each has a coverage limit of $20,000. Rather than placing additional coverage limits on one of the policies, the policyholder can formally associate them so that each can borrow from the limits of the others. Therefore, if one of the vehicles is in an accident with an uninsured motorist, the driver can receive coverage of up to $60,000.

Some states decide for you, as they allow stacking only across multiple policies. With that in mind, make sure to familiarize yourself with your state’s laws before proceeding with any decisions concerning your auto insurance, and pay close attention to the wording of your insurance policies to ensure you remain within the parameters that your insurance company has set.

Hopefully, this guide will come in handy if you’re looking for ways to get the most out of your uninsured or underinsured motorist insurance policy. To learn more, consider speaking with a representative from your insurance company to see whether stacking is an option for you.

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

We’re here to help you simplify car care and save, so this post may contain affiliate links to help you do just that. If you click on a link and take action, we may earn a commission. However, the analysis and opinions expressed are our own.


About the Author

FIXD Research Team

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

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