What is stacking?  Have you ever heard of it? 

I doubt that most people not involved in the insurance or legal industry have ever heard of “stacking”, but if you’re reading this blog, it is an issue that could be a very big deal in your potential car accident claim.

Earlier, I posted on the importance of carrying Uninsured/Underinsured Motorist Coverage to protect yourself from the many people in Colorado who are driving without insurance.  Stacking gives teeth to your underinsured (UIM) coverage.

If you purchase UIM, “stacking” means simply that if you are injured by another driver, and that driver’s insurance limits are below your total damages (including past/future medical bills, wage loss, and other categories), your UIM coverage will cover any remaining damages above the other driver’s policy limits.  Easy, huh? 

How about an example:

You are hit by a driver and it is entirely her fault.  She is insured, but her policy limits are $25,000.00.  You suffer a multiple level disc herniation in your neck, requiring surgery, hospitalization and substantial physical therapy/rehab.  Your medical charges are $32,000.00. 

You bring a claim and the defendant’s insurance company pays the $25,000 limits quickly and without challenge.  You are still undercompensated for the remaining $7,000 in bills, and your future medical treatment, emotional distress and wage loss haven’t even been considered. 

But, luckily, you took my advice and have $50,000 in UIM coverage!  At this point, your UIM policy “stacks” on top of the other driver’s $25,000, for a total of $75,000 in coverage. 

It is obvious why this is important, but I’ll say it.  For every driver who is totally uninsured out there, there are five drivers who have the minimum insurance limits of $25,000.  You may have the minimum.  That’s not a bad thing; you’re following the law. 

But, if you’re injured even moderately, $25,000 is likely not to cover all of your damages.  Think about the rising cost of healthcare.  An emergency department visit after an accident that includes heavy diagnostic tests (x-ray, MRI, CT-scan) can easily cost $5-10,000.00.  That is just for the emergency room!

So, stacking works in your favor to get your UIM to work with the other driver’s insurance.  But, you need to call your agent and get your UIM increased to at least $50,000.  It’s smart, and cheap. 

If you’re interested, the actual Colorado Revised Statute discussing UIM and stacking is 10-4-609.   Or, call me, John or Joe and we are happy to tell you more about it.