With hundreds of thousands of reported car crashes happening in Tennessee every year, auto insurance can frequently be a financial lifeline. Under the state’s Financial Responsibility Law, all drivers who cause a crash must pay for damages. Your auto insurance is a cushion that protects you in case of the unexpected.
Minimum liability and policy caps
The most common way to comply with at-fault liability laws is to carry the minimum liability insurance for drivers. In Tennessee, you may know the policy as “25/50/25”. It caps liability at $25,000 injury per person, $50,000 injury per accident and $25,000 property damage per accident. Liability insurance policies only compensate for damage to other parties when you are at fault, not your own damages.
If you are considering auto insurance policy options, minimum insurance caps might not be enough. Here’s why you should evaluate policies more carefully.
Skyrocketing bills and costs
Getting into major car crashes can instantly cause damage costing thousands of dollars. You are more vulnerable if expensive medical bills or long-term recovery plans enter the equation. And with medical bills getting more expensive every year, you may want to have a protective cushion just in case.
Health expenses are not the only costs to worry about. The average cost of both new and secondhand cars reaches into the tens of thousands today. Every year, Every year, incremental increases in expenses make state-minimum policies less and less relevant.
Exceeding policy limits
Your insurance limits and rising expenses can quickly put you in a dangerous financial position. If actual property damages and medical bills exceed your policy’s limits, you must pay those costs out-of-pocket.
Carrying only the bare minimum insurance is a major risk. The $25,000 limit may not be enough to cover the total damages of a car collision. Injured parties can sue you directly if medical bills exceed your policy limits.
Gaps in insurance
Liability insurance only compensates other drivers’ damages, not yours. If you are at fault, you are completely unprotected from paying for your own car repairs or medical costs. Liability insurance also does not pay for other causes of damage, such as natural disasters.
Even if you are not at fault, carrying only the minimum liability insurance puts you at risk. There are many uninsured or underinsured motorists (UM/UIM) in Tennessee. If one of them hits you, they may have no means to pay for damages. Many insurance carriers offer UM/UIM coverage to protect you from these situations.
In the aftermath
Choosing a good insurance policy is only half the battle. In the aftermath of a car crash, finding good legal representation can also ensure that the legal system works to uphold your rights.