The term “stacking” refers to combining the coverage limits from multiple insurance policies that may apply to a particular vehicle or person involved in a car accident. Stacking usually benefits those with severe injuries, and the limits of one insurance policy is not enough to adequately compensate them. Insurance companies tend to want to limit their risks by including provisions in the insurance policy that prohibit stacking. Such provisions are called “anti-stacking” provisions or clauses.

If you were involved in a car accident in Las Vegas, determining whether stacking is permissible requires analyzing the different types of car insurance coverage available in Nevada: liability, uninsured and underinsured (UM/UIM), and Medical Payments coverage.

Liability Insurance

Liability car insurance is the type of insurance coverage that Nevada requires all drivers to have. It provides compensation to those drivers injured by an at fault driver. Nevada generally prohibits stacking of liability insurance. The Nevada Supreme Court has found that there is no stated public policy that requires drivers to carry more than the state minimum liability insurance. The current state minimum is $25,000.00 per person and $50,000.00 per accident. Unlike uninsured and underinsured motorist insurance, liability insurance is not carried to protect the insured from their own injuries but to protect their assets from third-party claims.

The following are examples of how the foregoing applies in practice.

• Example 1: A person is injured by a negligent driver. That negligent driver owns three cars, all of which are insured under a single policy that provides a limit of $25,000.00 per person and $50,000.00 per person. The injured victim cannot stack the limit for each car, thereby tripling the amount the insurance company has to pay per person to $75,000.00.
• Example 2: A person is injured by a negligent driver who was operating a motorcycle. The motorcycle is insured by Company X. Besides the motorcycle, the negligent driver also owns a car, which is insured by Company Y. The insured victim will usually not be able to stack the motorcycle and car policies.

Uninsured and Underinsured Motorist (UM/UIM) Insurance

Uninsured Motorist or UM insurance applies when you are injured in an accident and the person who caused it has no effective insurance. If you have UM insurance, you also have UIM insurance. Underinsured Motorist or UIM insurance applies when you are injured in an accident and the person who caused it does not have enough insurance to cover your injuries, medical bills, lost wages, and pain and suffering.

Unlike with liability car insurance, Nevada law does permit stacking of UM and UIM insurance policies. It does so in recognition that drivers may pay extra premiums for increased UM or UIM coverage. See Rando v. California State Auto. Ass’n, 100 Nev. 310, 314-15, 684 P.2d 501, 504 (1984). Specifically, the Nevada Supreme Court stated “[a] reasonable expectancy of an insured in paying such premiums is an increase in personal coverage akin to that occurring when multiple life or medical policies are acquired.” Id.

Nevada has a long history of permitting stacking of uninsured motorist coverage. See Allstate Insurance Company v. Maglish, 94 Nev. 699, 586 P.2d 313 (1978) (allowed “stacking” of uninsured motorist coverage where two vehicles were covered by a single policy of insurance); State Farm Mutual Automobile Insurance Company v. Christensen, 88 Nev. 160, 494 P.2d 552 (1972) (upheld “stacking” of uninsured motorist coverage under five separate policies issued by insurer for five different cars); United Services Automobile Association v. Dokter, 86 Nev. 917, 478 P.2d 583 (1970) (allowed “stacking” of uninsured motorist coverage under two separate policies issued on two different cars by the same insurance carrier). See also Beeny v. California State Auto. Ass’n Inter-Ins. Bureau, 104 Nev. 1, 3, 752 P.2d 756, 757 (1988) (“We have previously held, on several occasions, that a person who purchases a multi-vehicle insurance policy or several policies may stack the policies’ UM coverage”);Carrillo v. State Farm Mutual Automobile Insurance Company, 96 Nev. 793, 618 P.2d 351 (1980) (allowed “stacking” of survivor’s benefit on each of five separate no-fault insurance policies issued by same insurer); Cooke v. Safeco Insurance Company, 94 Nev. 745, 587 P.2d 1324 (1978) (allowed “stacking” of basic reparation benefits under one insurance policy which insured two vehicles); Travelers Insurance Company v. Lopez, 93 Nev. 463, 567 P.2d 471 (1977) (stacking of basic reparation benefits under Nevada No-Fault Act approved where two separate no-fault policies from two different companies covered the same vehicle).
Unlike liability policies in which stacking is generally not permissible, public policy favors stacking UM coverage because an insured pays separate premiums. As explained by the Nevada Supreme Court:
Our decisions relating to uninsured motorist and basic reparations coverage emphasized the fact that separate premiums were paid for this type of first-person protection in connection with each insured vehicle. A reasonable expectancy of an insured in paying such premiums is an increase in personal coverage akin to that occurring when multiple life or medical policies are acquired. In each instance the person is the subject of the coverage and it is not relevant that the protection afforded in the form of uninsured motorist coverage or basic reparation benefits is attached to a policy of motor vehicle liability insurance.

Rando v. California State Auto. Ass’n, 100 Nev. 310, 315, 684 P.2d 501, 504 (1984).

The question that often arises is whether an anti-stacking provision in the UM/UIM policy is valid under Nevada law. In 1979, the Nevada legislature enacted a statute that permitted anti-stacking provisions. Section 687B.145 of the Nevada Revised Statutes (“NRS”) provides in relevant part as follows:

NRS 687B.145. Provisions in policies of casualty insurance: Proration of recovery or benefits; uninsured and underinsured motorist coverage; coverage for medical expenses; insurer not entitled to subrogation upon payment made because of underinsured vehicle coverage.

1. Any policy of insurance or endorsement providing coverage under the provisions of NRS 690B.020 or other policy of casualty insurance may provide that if the insured has coverage available to the insured under more than one policy or provision of coverage, any recovery or benefits may equal but not exceed the higher of the applicable limits of the respective coverages, and the recovery or benefits must be prorated between the applicable coverages in the proportion that their respective limits bear to the aggregate of their limits. Any provision which limits benefits pursuant to this section must be in clear language and be prominently displayed in the policy, binder or endorsement. Any limiting provision is void if the named insured has purchased separate coverage on the same risk and has paid a premium calculated for full reimbursement under that coverage.
2. Except as otherwise provided in subsection 5, insurance companies transacting motor vehicle insurance in this State must offer, on a form approved by the Commissioner, uninsured and underinsured vehicle coverage in an amount equal to the limits of coverage for bodily injury sold to an insured under a policy of insurance covering the use of a passenger car. The insurer is not required to reoffer the coverage to the insured in any replacement, reinstatement, substitute or amended policy, but the insured may purchase the coverage by requesting it in writing from the insurer. Each renewal must include a copy of the form offering such coverage. Uninsured and underinsured vehicle coverage must include a provision which enables the insured to recover up to the limits of the insured’s own coverage any amount of damages for bodily injury from the insured’s insurer which the insured is legally entitled to recover from the owner or operator of the other vehicle to the extent that those damages exceed the limits of the coverage for bodily injury carried by that owner or operator. If an insured suffers actual damages subject to the limitation of liability provided pursuant to NRS 41.035, underinsured vehicle coverage must include a provision which enables the insured to recover up to the limits of the insured’s own coverage any amount of damages for bodily injury from the insured’s insurer for the actual damages suffered by the insured that exceed that limitation of liability.

Interpreting the above, the Nevada Supreme Court has declared that an anti-stacking provision is permissible under the above statute when three requirements are met:

First, the limiting provision must be expressed in clear language. Second, the provision must be prominently displayed in the policy, binder or endorsement. Finally, the insured must not have purchased separate coverage on the same risk nor paid a premium calculated for full reimbursement under that coverage. Thus, non-compliance with either of the first two prerequisites or payment of a double premium, notwithstanding compliance with the first two prerequisites, will render the limiting provision void.

Neumann v. Standard Fire Ins. Co. of Hartford, Conn., 101 Nev. 206, 209, 699 P.2d 101, 103 (1985). In determining whether the limiting language is clear, the anti-stacking provision must be viewed from a lay person’s perspective. Id. at 209, 699 P.2d at 104. Specifically, as mandated by the Nevada Supreme Court, “the anti-stacking language must be truly comprehensible to the average insured.” Torres v. Farmers Ins. Exchange, 106 Nev. 340, 347, 793 P.2d 839, 843 (1990) (emphasis in original).

The Nevada Supreme Court applied the foregoing standards in Torres v. Farmers Ins. Exchange, 106 Nev. 340, 793 P.2d 839 (1990), and found that the anti-stacking provision did not satisfy the above standards. In that case, the Court dealt with two UIM policies covering two different vehicles issued by Farmers on behalf of the same insured. The insured’s daughter was injured in a non-covered vehicle (a friend’s moped) and made a claim under both policies. Farmers paid the UM limits under one policy but refused to do so on the other policy, relying on an “other insurance” clause that limits its coverage to “the limits provided by the single policy with the highest limits of liability.” The Nevada Supreme Court ruled against Farmers, finding this clause ambiguous. It explained that this clause (1) “fails to specify expressly that the limitation applies, regardless of the number of separate UM premiums paid,” (2) “fails to specify expressly that the limit applies regardless of the number of vehicles covered,” and (3) “does not expressly state that the limitation applies regardless of whether the insureds vehicles are covered under a single, multi-car policy, or under separate policies.” Id. at 347-348, 793 P.2d at 844.

If you or a loved one were injured in a car accident and want to know how much you are covered by your insurance, speak with one of our experienced car accident attorneys at D.R. Patti & Associates award-winning personal injury attorneys have a combined 50+ years of dealing with all aspects of a car accident case.