What is the unicorn of insurance coverage? Stacked personal lines liability insurance
In typical analysis of liability insurance coverage and whether and how they stack, most of the answers are negative. An example would be a car accident caused by a driver with $25,000 in liability coverage. A due diligence examination of the other potential coverages would include inquiring about whether there are additional liability insurance coverages in play. Typical car insurance policies provide coverage to the named insured as well as to any relatives residing in the same household. In analyzing whether that other insurance would stack on top of the liability policy covering the tortfeasor driver you also have to look at the owned vehicle language. While the policy grants coverage to the resident relative, the policy strips away the liability coverage if the driver is driving an owned vehicle!
That means when you are trying to stack liability insurance policies, the unicorn is the tortfeasor driving a borrowed vehicle.
Let’s use the example. Larry Smith is driving his friend Karl’s car. Larry has his own $25,000 policy of liability insurance. Karl also has a $25.000 liability policy on his car. Those two will stack together to make $50,000 in coverage. Larry also lives with Lucy, his grandmother and she has a separate policy with another company with another $25,000. because Larry was a resident relative, he is an insured under Lucy’s policy. Because Larry was not driving a vehicle he owned, the policy is not stripped away and all three policies cover him.
In other words, it is more beneficial to be driving someone else’s car when it comes to liability insurance.