Stacking refers to combining coverage limits across one or more insurance policies to increase the total amount available for a single covered loss. With automobile insurance, the issue of stacking arises with regard to bodily injury claims. Stacking can be considered inter-policy (i.e., between more than one policy) or intra-policy (i.e., multiple vehicles covered by the same policy).
Because states differ significantly on whether stacking is permitted, restricted, or prohibited, insurers must remain current on the specific stacking laws in every jurisdiction where they issue policies. The chart below provides a high-level summary of how each state addresses stacking, but the issue is often fact-specific and dependent on the policy language and the applicable laws.
Example of Application: Owners Insurance Company v. Walsh
In 2025, the U.S. Court of Appeals for the Fourth Circuit addressed the issue of stacking underinsured motorist (UIM) coverages under South Carolina law in a case involving a fatal collision between an insured riding his lawnmower and an underinsured motorist. The court ultimately held that stacking was not permitted. Owners Insurance Company v. Walsh, 134 F.4th 776 (4th Cir. 2025)
Background and Procedural History
The insured was operating a lawnmower when he was struck and killed by a speeding vehicle. The insured held two personal automobile policies, each providing $100,000 in bodily injury UIM limits and $50,000 in property damage coverage. After exhausting the at-fault driver’s liability coverage, the estate sought to stack UIM limits from both policies for a total of $300,000. The insurer denied the request and tendered only $150,000, the UIM limit for a single vehicle.
The insurer then filed a declaratory judgment action, claiming it owed no additional UIM benefits to the policyholder. The estate counterclaimed for declaratory judgement, breach of contract, and bad faith. The district court granted summary judgment for the insurer, holding that the policy language prohibited stacking. The estate appealed, and the Fourth Circuit affirmed, concluding that the estate was not entitled to additional UIM benefits.
Fourth Circuit Ruling
One central issue in the case was whether the insured qualified as a Class I or Class II insured under South Carolina’s UIM statute. If the insureds vehicle is involved in the accident (whether insured by the policy at issue or a separate policy), then the insured is considered Class I and entitled to stack coverage. In contrast, if the vehicle involved in the accident is not a scheduled vehicle (or not insured under a separate policy), then stacking is limited or entirely prohibited. Thus, the key question was whether the lawnmower qualified as a “vehicle” designed for use upon a highway.
The Fourth Circuit ultimately declined to decide that issue, explaining: “All of this semantic debate over what is meant by a ‘vehicle’ or ‘motor vehicle’ strikes us as somewhat beside the point, at least for purposes of this case. For even if the lawn mower were a statutory ‘vehicle,’ there is no dispute that it was neither insured nor legally required to be insured.” In other words, because the lawnmower was not a covered or insurable vehicle under the policy, the insured could not qualify as a Class I insured. Under South Carolina law, when the accident does not involve a covered vehicle, an insured is not statutorily entitled to stack UIM coverage.
Therefore, the availability of stacking depended solely on the policy language. The policy contained an enforceable anti-stacking provision, and the Fourth Circuit concluded that stacking was thus barred.
Key Takeaways
To ensure clarity and avoid costly coverage disputes, insurers should include express language in their policies if they intend to prohibit the stacking of UIM benefits in jurisdictions in which they are permitted to do so. Even so, the Walsh case demonstrates that in jurisdictions where stacking is not required by law, the lack of an anti-stacking clause is not always dispositive.
As the Fourth Circuit explained, “At the end of the day, the policy text must remain the guide if premiums are to be precisely calculated and coverages are to be fairly ascertained.”
