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Is stacking your coverage worth the higher premiums?

The law does not require carrying uninsured or underinsured motorist coverage on your auto insurance policy in New Mexico as it does in some states. However, that extra coverage will likely make a profound difference if you are seriously injured in a car accident. Medical bills can be astronomical, especially if you suffer severe or catastrophic injuries. These may require multiple surgeries, prolonged hospital stays, numerous prescriptions, physical therapy and other aids to your recovery.

You should not be surprised that the bill for such a recovery may reach hundreds of thousands of dollars. When you consider the required minimum for auto liability insurance is $25,000, you can understand why it is important to consider reviewing and re-evaluating your insurance policies to look for every option to maximize your coverage.

What is stacking?

In addition to carrying more coverage than the minimum required, you may have opted for uninsured/underinsured motorist coverage on your policy. If so, your insurance agent may have skimmed over the details about stacking, either because it is complex to explain or because stacking does not always benefit an insurance company, especially if it results in a larger payout for you. Stacking can be an important way to increase the coverage on your policy in a more cost-effective way. The basic concept of stacking includes the following:

  • You must carry uninsured motorist coverage on multiple cars.
  • If you are in an accident with an uninsured motorist, you can combine the coverage for all your vehicles into one claim.
  • For example, if you have two cars and carry $100,000 per person worth of UM coverage on each car, you can combine the coverage for both cars to be covered for up to $200,000 if you are in an accident with an uninsured driver.
  • Insurance laws do not allow stacking in every state, and your insurer will not automatically stack your policies, so it is good to examine your policy and ask questions.
  • Even in states where stacking is legal, your policy may not allow it.

There may be other exceptions and benefits that are specific to your insurer or your situation. Knowledge is power, and having a good understanding of your policy's limitations will prevent you from facing the expense of an accident with inadequate coverage. In the event you should need to use your auto insurance, having a legal advocate will improve the chances that you receive the benefits you deserve.

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