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This change is particularly important to households with more than one auto policy in effect (parent policy plus separate policy for a child, or siblings, etc), effective November 1, 2011, you can no longer collect on multiple policies for Uninsured and Underinsured Motorists coverage unless you have Stacked benefits. There is an additional charge to switch from Unstacked to Stacked benefits. So, now you are probably asking what does this all mean?? Let's start by reviewing what the uninsured and underinsured motorist coverages do.
Uninsured motorist coverage- Pays damages that you, household relatives and passengers in the insured motor vehicles are legally entitled to recover because bodily injury or death is caused by uninsured or hit and run motor vehicles.
Underinsured motorist coverage-Pays you, household relatives and passengers in your insured motor vehicle against bodily injury damages arising out of accidents with motorists who have motor vehicle insurance with lower limits of liability coverage than those damages suffered by you.
You have the option to stack or unstack your uninsured and underinsured motorist coverages. If you stack the coverages you can multiply your limits by the number of vehicles on your policy giving you an increased amount of coverage. For example, you have $100,000 per person/$300,000 per accident stacked for your uninsured and underinsured motorist coverages and you have 2 vehicles. You would be able to collect up to $200,000 per person/$600,000 per accident. Under the new rules, having stacked coverage will also allow you to collect under your policy if you are injured in another household members car that has his or her own Erie auto policy. If you do not have stacked limits you would only be able to collect up to the per person/per accident limit of the vehicle you are occupying and you would not be able to collect under your own policy if you are injured in another household members car that has his or her own Erie auto policy. Here are some examples where this could come into play:
1. A child that lives with mom and dad has his own Erie auto insurance policy. Mom and dad also have Erie Insurance. The child is in an accident with mom and dad's vehicle involving an uninsured or underinsured motorist. The child does not have stacked coverages, therefore he can only collect under the policy of the vehicle he was driving, mom and dad's policy. If the child had stacked coverages he could also collect under his own policy. This also holds true if mom or dad is in an accident with the child's vehicle and all are insured with Erie insurance. Mom and dad can only collect under their own policy if they have stacked uninsured or underinsured motorist coverages.
2. A child that has his own Erie policy is injured in his own vehicle. He has exhausted his own uninsured or underinsured coverages and would like to collect from mom and dad's Erie policy. The child must have stacked uninsured or underinsured motorist coverages to collect under mom and dad's policy.
These examples only apply if all household members involved have Erie insurance. If a household member does not have Erie, there is no way that they can collect under the other household member's Erie policy for an uninsured or underinsured motorist claim.
We know this is a lot to think about and understand, so call us to review how this change affects your coverage or if you want to change your coverage.
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