Often more than one automobile insurance policy is in effect for vehicles involved in a collision. Sometimes a single insurance policy can contain several types of coverage that could be applied to the accident. When these situations exist, an insured or the passengers in the insured’s vehicle may seek to combine the benefits of the multiple coverage provisions in the policy or policies. This is called “stacking.” It can also be called “pyramiding.”
Stacking does not involve any form of double recovery. It is done because the benefits from a single type of coverage or a single policy do not fully compensate an injured person for all of his or her damages.
There are different types of stacking depending upon what an insured is attempting to obtain. If multiple coverages exist in one policy, combining them is referred to as intra-policy stacking. If multiple coverages exist in multiple policies, combining them is referred to as inter-policy stacking. When an insured tries to stack insurance benefits for which the insured is in the same category of insureds, then horizontal stacking occurs. Vertical stacking occurs when the insured has coverage in different categories, under different insurance policies, and he or she tries to combine those benefits.