What does "stacking limits" refer to in automobile insurance?

Stacking limits in automobile insurance refers to the practice of combining or adding coverage limits for multiple vehicles insured under the same policy or across multiple policies. This allows policyholders to access higher limits of coverage by effectively aggregating the limits applicable to each vehicle. For instance, if a policyholder has several vehicles insured and one vehicle experiences damage, stacking limits allows them to utilize the coverage from their other vehicles to help meet the financial needs arising from that damage.

This concept is often seen as beneficial for policyholders who want to ensure they have comprehensive protection, especially in situations where multiple vehicles may be involved in an accident or when multiple policies cover different vehicles owned by the same individual. Understanding stacking limits is essential for policyholders seeking to maximize their coverage and protection in the event of an incident involving their automobiles.