Insurance, like most industries, has it’s own unique vocabulary. There is “legal-ese”, “accounting-ese”, and “insurance-ese.” One of the more unusual topics that we discuss with clients is the coverage option of uninsured/underinsured motorist coverage. Unlike liability coverage that pays others in you injured them or damage their property, uninsured/underinsured motorist, UM/UIM,coverage protects YOU. Uninsured motorist coverage protects you in the event you are injured by someone who has NO coverage, while underinsured motorist protects you in the event you are injured by someone who has insufficent coverage. Any just to make it really interesting, you can “stack” or “unstack” these coverages… just like pancakes.
That’s right, I said pancakes. So, the concept of unstacking and stacking applies ONLY to the uninsured/underinsured motorist coverages. In Pennsylvania, if you own more than one car. you may “stack” your UM/UIM coverages, stack them just like pancakes. So, if you own two cars, you could stack the coverage and have twice the amount of coverage you buy. $300,000 of UM/UIM stacked with two cars? You really have $600,000 of this coverage. Three cars and $300,000 of UM/UIM stacked? Yu would have $900,000 of UM/UIM coverage. Unstacking means that regardless of the numbers of cars you own, you have only the limit of coverage you buy. $500,000 of UM/UIM unstacked with 3 cars? You have only the $500,000 of coverage.
There are four major component parts of your auto coverage. Libaility, as indicated above, pays others for what you might do to them with your car. The unisured/underinsured protect you in the event you are injured by another. There is collicion and other than collision coverage. These protect the car is you damage it, or it is damaged by an uninsured motorist. Finally, there is coverage that would pay your medical bills, lost wages, a funeral benefit, or accidental death coverage if you choose to buy those coverages.
Make sure than you understand what each section of coverage does for you and make sure that your coverage will do what you want it to do when you need it to do it.