Anti-Stacking Provisions

Anti-Stacking Provisions an insurance policy provision which prevents more than one limit or deductible from applying to a single insured event. Anti-stacking provisions (or stacking provisions) are most commonly applied in situations in which exposure to an insured risk may last a long period of time. The longer the time period, the more likely the risk is to be covered under multiple policies. This type of provision is also referenced in auto insurance policies.

Anti-stacking provisions prevent an insured party from collecting damages from multiple insurance policies for a single occurrence. Insurance companies use these provisions to limit their liability. For example, an insurance company may consider water damage from several different leaks to be a single occurrence rather than treat each leak as a separate occurrence.

Anti-stacking provisions are common in the auto insurance industry. Auto insurance policies refer to different classes of insured individuals. Class 1 insurance covers a narrow group of people, such as the spouse of the named insured and family members who may live with the named insured. Class 2 insurance extends coverage to individuals who may not be resident relatives of the policyholder, but who may have permission to use or occupy the insured vehicle.

Insurance companies may limit the amount of uninsured motorist coverage in some cases; specifically, if an individual covered by a Class 1 insurance policy is injured in a vehicle that he or she owns (or that is owned by a spouse or resident relative) but that does not have its own uninsured motorist coverage purchased for it. For example, an individual purchases Class 1 insurance for a car, and the policy provides uninsured motorist coverage. He also owns a truck that does not have uninsured motorist coverage. If he is injured in the truck, the insurer may limit the coverage, depending on the wording of the policy language.

Whether stacking is allowed in a certain claim can be open to interpretation of the parties involved and the courts under various state laws. In the case of auto insurance liability, the courts have generally upheld that, for example, a $100,000 limit is the "per person, per accident" maximum limit of liability coverage. If two cars are involved in an accident, and even if there's two separate insurers, the limit of the payout would be $100,000 - not $200,000.

Read your policy to see about the stacking clauses and consider raising your policy limits or buying an umbrella policy if the coverage doesn't seem adequate.