What Is PIP Stacking?

No one plans for a car accident so you might not fully understand some elements of auto insurance until it's time to use them. Personal injury protection is a component of car insurance coverage that provides funds for some expenses and loss after a car accident. PIP stacking is a way to extend the funds available to you after an accident.

Personal Injury Protection

Some states have enacted no-fault car insurance coverage for portions of loss related to motor vehicle accidents. Personal injury protection pays for medical expenses, lost wages and services or funeral expenses. Money from PIP protection is paid by your insurance company regardless of your liability in the accident. Several states also allow PIP coverage as an option on your policy. Payments are expedited to injured parties without the need for litigation to determine which driver was at fault.

Limits to PIP

Each state allowing PIP insurance sets its own minimum limits for coverage. These vary widely. Typically, PIP insurance covers the policy holder and household residents as well as non-family passengers involved in an accident, so if you are insured to your state's minimum coverage of, for example, $20,000, an accident involving several passengers may quickly consume all the funds available from PIP coverage. PIP stacking is one affordable option to extend the funds available in time of need.

PIP Stacking

When you have more than one vehicle insured with the same insurance provider, you may be able to stack coverage for a small additional premium. Stacking essentially lets you combine the coverage from each insured vehicle in the case of an accident involving one of them. Using the example of $20,000 minimum coverage, if you have two vehicles, you will have a potential pool of $40,000 to draw from for PIP coverage after an accident. With three cars, coverage extends to $60,000.

Other PIP Considerations

Stacking coverage is not automatic. You must have each vehicle insured with the same company and you will have to pay extra on the insurance premium for each vehicle to get PIP stacking. You can also purchase additional PIP coverage for a single vehicle, though generally this is more expensive than stacking coverage. Some states have thresholds to PIP coverage beyond which you may sue an at-fault driver. These thresholds may be monetary or related to the severity of the injury. Coverage in each state varies, so talk with your insurance provider about options open to you.


About the Author

As an operations and technical projects manager in the photofinishing industry, Scott Shpak is also an experienced audio engineer and musician, as well as Editor-in-chief, feature writer and photographer for Your Magazines Canada.