Understanding Full Coverage Auto Insurance In Tennessee

Tennessee requires all drivers to have some proof of financial responsibility in order to drive. The most common way to meet this requirement is to have car insurance with at least the minimum coverage limits: $25,000 for bodily injury liability per person and $50,000 per accident, along with $25,000 for property damage. However, full coverage insurance in Tennessee is usually defined as a policy that provides more than the state's minimum liability coverage. This includes optional collision and comprehensive insurance, which covers the cost of repairing or replacing your car after an accident, regardless of who is at fault.

Minimum liability coverage

In Tennessee, drivers are legally required to carry a minimum amount of car insurance, which includes liability insurance. This is the only insurance that is strictly required by the state. Liability coverage is split into bodily injury liability and property damage liability. The minimum coverage amounts are as follows:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $15,000 to $25,000 for property damage per accident

Bodily injury liability covers the medical costs associated with a car accident, including funeral expenses in many cases. Property damage liability covers the cost of damage to another person's property, which is typically the victim's car, but it is not limited to that.

While liability coverage is the only insurance mandated by the state of Tennessee, a bank or lien holder may require additional coverage if your vehicle is being financed. This usually includes comprehensive and collision coverage.

The average annual cost for state minimum coverage in Tennessee is around $450, with monthly costs ranging from $36 to $39. However, it is recommended to purchase coverage above the state-mandated minimums, as the minimum coverage limits may not be sufficient in the event of a serious accident.

Collision coverage

In Tennessee, collision coverage is not legally required, but it may be mandatory if you lease or finance your vehicle. If you own your vehicle outright, collision coverage is typically considered optional. However, it is important to note that lenders in Tennessee usually require collision coverage in addition to the state's minimum insurance requirements when you finance a car.

When deciding whether to choose collision coverage, consider your personal financial situation. If you are unable to afford to repair or replace your vehicle after an accident, collision coverage can provide peace of mind. Additionally, consider the value of your vehicle. If your vehicle is brand new or still worth a considerable amount, collision coverage can help with expensive repairs or replacement costs.

It is worth noting that collision coverage has some exclusions. For example, it does not apply to collisions with animals, which would be covered under comprehensive coverage. Similarly, injuries or damage caused to another driver and their vehicle would be covered under your liability coverage.

Comprehensive coverage

Comprehensive insurance covers the cost of repairing or replacing your vehicle if it is damaged by something other than a collision. This includes damage caused by falling objects, natural disasters, floods, fires, theft, vandalism, or animals. It also covers damage caused by non-collision events, such as theft, fire, or natural disasters. For example, if your car is stolen or vandalised, comprehensive insurance will pay for the repairs or replacement.

The cost of comprehensive coverage varies depending on the deductible you choose. In Tennessee, a comprehensive insurance policy with a $1,000 deductible costs $1,093, 193% more than liability-only car insurance. For a comprehensive policy with a $500 deductible, you can expect to pay around $1,327.

Lenders usually require you to have comprehensive coverage in addition to the minimum insurance required by Tennessee law when you finance a car. This ensures that you are fully covered in case of any non-collision damage to your vehicle.

Uninsured/underinsured motorist coverage

Tennessee has a fault-based insurance system, meaning that after a car accident, victims can recover damages from the at-fault motorist's insurance company. However, if the at-fault motorist is uninsured or underinsured, victims may struggle to pay for the costs of their collision, even if they have a comprehensive health insurance policy.

Uninsured motorist coverage, sometimes referred to as UM or UMBI, is designed to protect accident victims in the event that the other driver does not have liability coverage, or if the driver commits a hit-and-run. It also covers situations where the other driver's insurance company denies coverage or becomes insolvent. This type of coverage can provide reimbursement for medical bills, lost income, emotional pain and suffering, and funeral expenses.

Underinsured motorist coverage provides similar benefits if the at-fault driver does not have sufficient insurance to compensate for the victim's losses. In most cases, an underinsured motorist policy will provide additional compensation on top of what the at-fault driver can cover.

In Tennessee, uninsured motorist coverage is included in every automobile liability insurance policy unless it is rejected in writing by the insured. While not legally required, this type of coverage is highly recommended, as an estimated 20- 25% of Tennessee drivers are uninsured. If you are in an accident with an uninsured driver and do not have this coverage, you may be stuck paying for your repairs out of pocket.

Medical payments coverage

If you have health insurance, you may not need medical payments coverage, as your health insurance will cover your medical expenses after a car accident. However, medical payments coverage can still be useful for covering out-of-pocket healthcare costs like deductibles, copays, and coinsurance. It can also be used to cover the deductibles or copays of other types of insurance, like health insurance or personal injury protection (PIP) car insurance.

In summary, while not required, medical payments coverage can be a valuable addition to your car insurance policy in Tennessee, providing financial protection in the event of a car accident, regardless of who is at fault.

Frequently asked questions