Non-Stacked Uninsured Motorist – a $100,000 mistake


I can hear some people thinking out loud now, “Is he EVER going to stop talking about the dangers of non-stacked UM?” The answer is, “Yes, of course. As soon as every motor vehicle liability policy in the state of Florida has UM limits stacked and equal to the BI limits.” Until then, I will keep “preaching the gospel!”

If folks sat where I sit and saw what I see (all too often), their thought process would be the same as mine: always stack the UM. So, what generated my latest “ranting?”

Just this week I received a phone call from an attorney who specializes in personal injury claims. He had seen an FAIA article I had written about UM, and contacted me asking my view of a case he was involved in. It seems that Bill and Sue (Names made up) had a Personal Auto Policy (PAP) covering one vehicle; both were listed as named insureds on the declarations page. The PAP provided UM limits of 100/300 written on a non-stacked basis. Sue was the owner of a business, “Shoes By Sue Inc.” (Name made up.) The business owned an automobile, but the “kicker” here is that the vehicle was jointly titled to both Sue and Shoes By Sue Inc.

Bill was in the company vehicle, and was injured by an at-fault driver who had low limits of bodily injury. The attorney submitted a claim for UM under the PAP and the carrier denied the claim citing this non-stacked exclusion:

A. We do not provide Uninsured Motorists Coverage for “bodily injury” sustained:
1. By an “insured” while “occupying” any motor vehicle owned by that “insured” which is not insured for this coverage under this policy.

The attorney asked my opinion of the denial. After advising him that I was not an attorney, and nothing I said should discourage him from pursuing the claim, I said that based only on the facts presented, the carrier’s denial seemed to be correct. I also said that it was sad that for a “few dollars” saved on non-stacked UM, the customer lost out on $100,000 of UM had it been stacked.

I asked an agent in the county where the claim took place to look at an existing policy with 100/300 non-stacked UM on one car and quote it as stacked. The difference was $41 per six months. (The county is, by the way, known for high insurance rates.) That probably seemed like “a lot of money” when the policy was written; it’s “chump change” now.

A fellow “insurance nerd” educator buddy of mine has a saying that holds true all too often, especially here: “The bitterness of no coverage is remembered long after the sweetness of low price is forgotten.”

The attorney said, in conclusion, “I see all sorts of people walk in the office with no UM or very low limits. I tell everyone I see, “Buy a lot of UM and always stack it.” I bet he and I would get along real well over a plate of BBQ as we discussed UM.

For more information about stacking vs. non-stacking, check out this article from our Education Library.

Go, my friend…always stack the UM.

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