What are Anti-Stacking Provisions?

An Anti-Stacking Provision is used in insurance policy to prevent multiple applications of deductibles or limits to a single loss or insured event. Insurance companies use stacking provisions or anti-stacking provisions for policies that last for a long period of time and are exposed to many insured risks. Anti-stacking provisions prohibit more than one limit or deductible to the applied to a single insured event. Usually, insurance policies that cover exposures that last for a long period of time often entail coverage under multiple policies which the anti-stacking provisions help to prevent.

How Do Anti-Stacking Provisions Work?

In a simple language, anti-slack provisions prevent an insured from collecting damages from many insurance companies on a single insured event. The insured party is only allowed to have a single limit or deductible from a single occurrence. If an insured party makes multiple claims or collects multiple damages from a single insured event results in much liabilities for insurance companies. In abid to limit their liabilities, insurance companies often use the anti-stacking provisions. In auto insurance policies, anti-stacking provisions are commonly used, due to different classes of insured persons under the auto insurance policies, using the anti-stacking provision is important in the auto insurance industry. Depending on the language of a policy and its provisions, stacking can be permissible in some insurance policies. In certain cases, the court in a state can also determine whether stacking is allowed or not, especially when the parties involved are pitched on different sides when it comes to interpretation of whether stacking is allowed or not. Policyholders are often required to understand their policies as to whether stack is allowed or otherwise.