Stacking of Uninsured Motorist Benefits Within a Single Automobile Insurance Policy

This paper presents a model to determine the change in probability of payoff of an uninsured motorist's benefit when an additional vehicle is added to an existing automobile insurance policy. The hypothesis to be tested is that there is no increase in this probability and that, therefore, any increase in premium for uninsured motorist coverage should be construed as paying for increased coverage. The courts have called this "stacking" or coverage, implying that the injured insured could collect the UM coverage from several different vehicles. … Model variables include the number of vehicles insured under the existing policy, a usage factor which reflects changes in the household's pattern of use of their automobiles, and the proportion of uninsured motorists in the population of vehicles. Number of drivers in the household is held constant. The theoretically fair pure premium is based on the additional risk being assumed by the insurance company. The study concludes that there is a definable increase in risk and that a proportional increase in pure premium is justifiable; any further increase in pure premium should be construed as adding coverage through stacking.