LA Insurance

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La insurance stacking claims

A big issue in auto La insurance is medical claims and a practice known as stacking. This means combining medical liability limits from several insured vehicles—or even several different policies—to cover one big claim.

Stacking insurance against a single claim allows drivers who insure more than one vehicle with the same insurance company to combine specific kinds of coverage from all insured vehicles.

‘ For more on Liability coverage, see related articles on la insurance claim policy and practices.

For example, if you have $50,000 of uninsured/ underinsured motorists coverage on each of two cars, you could stack them and apply $100,000 of coverage toward one accident.

In December 1994, the New Jersey supreme court ruled that an anti-stacking provision in the state’s no-fault auto insurance system didn’t prevent a man who suffered catastrophic injuries in a motorcycle accident from recovering personal injury protection (PIP) benefits from two insurance companies.

The 7-0 ruling resolved the case of Brian Lihou, who was seriously hurt in 1987 when the motorcycle he was riding collided with a car. Because he was riding a motorcycle, his medical bills were not covered under the basic PIP benefits coverage of his auto insurance policy with the state-run Joint Underwriting Association.

The policy, however, contained an extended medical expense benefits provision, which furnished up to $10,000 coverage for injuries in motorcycle accidents. So the JUA paid Lihou the $10,000.

Lihou, who was living with his mother at the time, also sought coverage under her auto insurance with Aetna Casualty, on which he was listed as a driver. Aetna refused to pay, arguing the anti-stacking provision prohibited Lihou from being paid by two insurance companies. Lihou sued.

A trial court agreed with Aetna, as did the appeals court. But the state supreme court ordered Aetna to pay. In a nine-page, unsigned opinion, the justices concluded:

Supporting our determination are sound public-policy considerations, perhaps best illustrated by the circumstances of this case. [Lihou]‘s medical expenses exceed $35,000.

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Requiring Aetna to pay its $10,000 limit—the maximum that the carrier can provide under the [insurance] commissioner’s regulation—will result in no windfall to [Lihou], no double recovery of any medical expense, and indeed [Lihou] will be left with a balance of over $15,000 in uncompensated expenses.

To stack insurance coverages after an auto accident, you need more than one insured vehicle. But insurance companies will sometimes charge policyholders with a single car for stacking privileges.

If you own one car, there’s nothing to stack and no reason to pay for the right to do so.

In the fall of 1995, a group of Pennsylvania policyholders filed a series of class-action suits charging the state and all auto insurance companies doing business there with systematically charging drivers with one car for non-existent stacking rights.

“You’re paying [stacking premiums], even though it can be of no benefit to you,” said attorney Joseph Roda who helped draft the suits. “It’s a windfall for the insurance companies, because nobody can ever file a claim for it.”

Roda said single-vehicle drivers had been charged for stacking since 1990, when a Pennsylvania auto insurance reform law known as Act 6 took effect. The law allowed all drivers to reject stacking rights and reduce their overall insurance bill. But, unless single-vehicle drivers signed a waiver, they could be charged an extra premium—one which wasn’t itemized on most bills.

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