Progressive Settles Coverage-Stacking Class Action for $1.7M: What It Means for Policyholders
Have you ever wondered if you’re truly getting the most out of your auto insurance policy? A recent settlement involving Progressive Northern Insurance Co. highlights a common concern among policyholders: are they being charged fairly for the coverage they receive? In a class action lawsuit, Progressive agreed to pay \$1.76 million to resolve claims that it unfairly charged premiums for stacked uninsured/underinsured motorist (UM/UIM) coverage on single-vehicle policies in New Mexico. This case, Peck v. Progressive Northern Insurance Co., brings to light the complexities of UM/UIM coverage and the concept of “stacking.”
Understanding Coverage Stacking
So, what exactly is “coverage stacking,” and why does it matter? Stacking refers to the ability to combine the coverage limits from multiple vehicles or insurance policies to increase the total amount of protection available to an insured party. This typically applies to Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage, which protect you if you’re hit by a driver who either has no insurance or doesn’t have enough insurance to cover your damages.
Imagine you have three vehicles, each with \$25,000 in UM coverage. If stacking is allowed, you could potentially have \$75,000 in coverage available if you’re hit by an uninsured driver. However, the rules surrounding stacking can be complex and vary significantly by state.
The Progressive Class Action: An “Illusory” Benefit?
In the Peck v. Progressive case, the plaintiffs argued that Progressive was charging unfair premiums for stacked UM/UIM coverage on policies that only insured a single vehicle. Their argument was that this “stacked” coverage provided no additional benefit to the policyholder, making the extra premium charged “illusory.” In other words, they were paying more for something that didn’t actually give them any extra protection.
The lawsuit alleged that Progressive violated the New Mexico Unfair Insurance Practice Act, breached its contract with policyholders, and engaged in unfair trade practices. While Progressive didn’t admit any wrongdoing, they agreed to the \$1.76 million settlement to resolve the allegations.
Who Was Affected?
The Progressive settlement benefits policyholders who meet the following criteria:
- Resided in New Mexico
- Purchased or paid for a Progressive insurance policy that included stacked UM coverage
- The policy insured only a single covered vehicle
- The policy was in effect between January 1, 2009, and April 30, 2025
What the Settlement Provides
The settlement provides different benefits to class members depending on the specific circumstances of their policy. Those who made automatic payments may be eligible for automatic payments. Other class members need to submit a claim form. The deadline to submit a claim or opt out of the settlement is January 12, 2026. The final approval hearing is scheduled for February 23, 2026.
Stacking: State-by-State Variations
The Progressive case highlights the importance of understanding your state’s laws regarding coverage stacking. Some states require stacking, some allow it, and some prohibit it altogether. Even in states where stacking is generally allowed, insurance companies may include “anti-stacking” language in their policies.
Here’s a general overview of how stacking works in different scenarios:
- Stacking on a Single Policy: In some states, if you have multiple vehicles insured on the same policy, you can stack the UM/UIM coverage limits for each vehicle. For example, if you have two vehicles on a policy with \$25,000 UMBI coverage on each, stacking would increase your UMBI limits to \$50,000 per accident.
- Stacking Across Multiple Policies: Some states allow you to stack UM/UIM coverage limits across multiple car insurance policies, even if they are with different insurers. For example, if you have a policy for your personal vehicle and are also listed on a family member’s policy, you may be able to stack the UM/UIM coverage from both policies.
Important Note: Stacking typically only applies to the bodily injury portion of UM/UIM coverage, not property damage.
Is Stacking Right for You?
Deciding whether to stack your insurance coverage depends on your individual circumstances and risk tolerance. Here are some factors to consider:
- Cost: Stacked insurance generally comes with higher premiums than unstacked coverage.
- Number of Vehicles: If you own multiple vehicles, stacking can provide significantly higher coverage limits.
- State Laws: Understand your state’s laws regarding stacking to determine if it’s even an option.
- Risk Tolerance: Assess your comfort level with risk. If you’re concerned about being adequately protected in an accident with an uninsured or underinsured driver, stacking may be worth the extra cost.
- Health Insurance: If you have a high-deductible health insurance plan, stacked coverage can help cover medical expenses in an accident.
What to Do If You’ve Been Injured by an Uninsured Driver
If you’ve been injured in an accident with an uninsured or underinsured driver, here are some steps you should take:
- Report the Accident: Contact the police and file an accident report.
- Seek Medical Attention: Get prompt medical treatment for your injuries.
- Notify Your Insurance Company: Inform your insurance company about the accident and your intent to file a UM/UIM claim.
- Gather Evidence: Collect any evidence related to the accident, such as photos, witness statements, and medical records.
- Consult with an Attorney: An experienced personal injury attorney can help you understand your rights and navigate the complexities of UM/UIM claims and coverage stacking.
The Bottom Line
The Progressive settlement serves as a reminder to carefully review your insurance policy and understand the coverage you’re paying for. Don’t hesitate to ask your insurance agent questions about UM/UIM coverage and whether stacking is available in your state. By taking the time to educate yourself, you can ensure that you have the right protection in place should the unexpected happen.