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Learn About Stacking Benefits on Your Pennsylvania Car Insurance
Among the many options you're given when selecting a car insurance policy, you may be curious about what the term "stacking" means. It's a fairly simple idea that involves multiplying your Uninsured/Underinsured Motorist (UM/UIM) coverage to offer greater protection to you and your loved ones after an accident.
Essentially, stacking your benefits will multiply the limits of your UM/UIM coverage by the number of vehicles you have on the same policy. So, if you have two cars insured for $100,000/$300,000 of Uninsured/Underinsured Motorist coverage, stacking will multiply these limits by the two cars on your policy.
With stacking, you will have $200,000/$600,000 available to you in the event of an accident with an uninsured or underinsured driver. It's also important to note that adding UM/UIM is extremely inexpensive to add to your policy.
Stacking Can Save You Thousands
While many people understand the concept of stacking, they often fail to see how it could benefit them in the event of an accident. We often hear people ask, "Why do I need extra coverage?"
While you may have a good policy, what if the other driver doesn't have insurance? Or, in a much more common scenario, they have insurance, but it only covers the bare minimum required by law. This is why UM/UIM coverage and stacking are so important.
An Example of Stacking Benefits
Let's say you're in an accident. Your medical bills are $200,000 and the other driver has Pennsylvania's minimum requirement for Bodily Injury Liability – $15,000. Stacking would affect your limits as follows:
- Stacked – 2 cars with UM/UIM is $200,000 + the other driver's $15,000 of state required coverage = $215,000 for your injuries and medical expenses.
- Not Stacked – $100,000 for UM/UIM + the other driver's $15,000 = $115,000
- No UM/UIM – $0 for UM/UIM + the other driver's $15,000 = $15,000 for injuries and medical expenses
In this scenario, the difference between stacking your UM/UIM coverage and not is losing out on $100,000 in coverage for your medical expenses.
It's easy to see why Uninsured/Underinsured Motorist coverage is important, and why stacking them can make the difference, especially if your health insurance doesn't cover certain procedures. And remember, you can change your insurance policy any time, but make sure you do it before you need it.
FULL TORT VERSUS LIMITED TORT COVERAGE
WE RECOMMEND FULL TORT COVERAGE FOR DRIVERS
Limited tort" means you have restricted rights to sue for compensation in a car accident, usually only allowing recovery for economic damages like medical bills and lost wages, while "full tort" gives you the full ability to sue for all damages including pain and suffering, essentially providing wider legal options to recover compensation after an accident, though it typically comes with a higher insurance premium; the key difference lies in your ability to claim non-economic damages like pain and suffering.
Key points about limited vs full tort:
- Compensation scope:
Limited tort limits the type of damages you can claim, usually only allowing for economic losses like medical bills and lost wages, while full tort allows you to seek compensation for both economic and non-economic damages (pain and suffering).
- Cost:
Limited tort insurance premiums are typically lower because it restricts your ability to sue, while full tort insurance is usually more expensive due to the wider range of potential compensation.
- Serious injury threshold:
In some states, with limited tort, you may only be able to sue for pain and suffering if your injuries meet a specific "serious injury" threshold.
SUBROGATION BY INSURANCE COMPANIES
When you get hit by another driver who is at fault but doesn’t have enough insurance to cover you damages, your own insurance company may pay you if you have Underinsured or Uninsured Coverage, but they will want their money back if you have a recovery from a lawsuit:
Here’s an example of how auto subrogation works:
- You get rear-ended and the other driver is at fault.
- You report the accident to the other person’s insurance company and file a claim.
- The other driver’s insurance company pays for your repairs and medical bills.
- If the other company is taking too long to pay you, your insurance company may pay you.
- They will then file a subrogation claim against the other driver and seek reimbursement for the money your company paid you as well as your deductible.
What to Expect During Subrogation?
As part of the car insurance claims process, your insurer will tell you if it will file a subrogation claim. This doesn’t mean your insurance company will do this for every not-at-fault claim. Keep in mind that state laws vary, so some claims or expenses may not be eligible for subrogation. In Pennsylvania, the first $5000 of medical coverage can be exempt from this.
If your insurer’s subrogation claim is settled, you may not get your deductible back if full compensation is not received. For instance, if your insurance company only gets 70% of the money back from the other company, they may not refund your deductible.
How Long Does the Subrogation Process Take?
There isn’t one answer to how long the subrogation process takes. For example, if the other driver has insurance, is 100% at fault and doesn’t contest your claim, it might be a fairly quick subrogation process. On the other hand, it can be a longer process if an uninsured driver is at fault or it’s unclear who’s responsible for the accident.
Different factors can impact how long the subrogation process takes:
Uninsured Drivers
This can lengthen the subrogation process because your insurer will have to sue the other driver directly, since they don’t have insurance coverage.
Fault Is Unclear or Both Drivers are at Fault
If it’s unclear who’s at fault, or if both drivers are responsible, it could affect the results of the subrogation process. If you’re partially at fault for an accident, your insurer may only be eligible to recover part of your costs or none at all, depending on state law.
What Is a Waiver of Subrogation?
A waiver of subrogation prevents your insurance company from pursuing the at-fault party. You might sign a waiver if the at-fault driver wants to settle with you. Before you sign any waivers, it’s a good idea to consult with your insurer. Not every auto insurance company allows its drivers to sign waivers of subrogation or do anything that can affect its efforts to recover money.
This guide is not a complete summary of the Pennsylvania Auto Insurance Law. It is designed to highlight certain important features of this law and should not be considered legal advice. Everyone has different insurance needs. If you have any questions concerning your coverage, please contact your
