In Tennessee, you must have $25,000 in liability coverage through your auto insurance. This is the minimum coverage you can have in Tennessee. However, too often we see people choose not to include uninsured or underinsured coverage on their policy. This is critically important.
Importance of Uninsured and Underinsured Coverage
Unfortunately, not all drivers carry the appropriate insurance on their vehicles. If you are hit by someone who does not have insurance, your options are seriously diminished with uninsured or underinsured coverage. Uninsured coverage basically means if you are hit by someone who does not have insurance, you can use your own policy to be compensated for medical bills and pain and suffering. If you do not have uninsured coverage, your chances of recovering money are very limited.
Underinsured motorist coverage applies in situations where the at-fault driver has less insurance available than you. For example, if you have $50,000 in underinsured coverage, and the at-fault driver has $25,000.00 in coverage, there is an additional $25,000.00 you may be able to recovery in your case. Underinsured coverage is the difference between your underinsured coverage and the at-fault driver’s policy limits. So if you have $100,000.00 in coverage and the at-fault driver has $50,000.00, there may be an additional $50,000.00 you can obtain as an award. So in that case, you could receive $50,000.00 from the at-fault insurance carrier and $50,000.00 from your own policy. If you do not carry underinsured coverage, you would be limited to $50,000.00, the at-fault policy maximum, as a realistic recovery. Given the rising costs of medical bills, obtaining the maximum you can in uninsured and underinsured coverage is vital protection to you and your family.
Invest in Gap Insurance After You Buy a Vehicle
Lastly, when you purchase a vehicle, we recommend always investing in Gap insurance. Gap insurance applies when what you owe on the vehicle is more than the vehicle is worth. For example, let’s say you have a car note that has $10,000.00 remaining to be paid but the car is worth $7,000.00. If your car is totaled in an accident, the at-fault insurance company only has to pay the value of the car, here $7,000.00. This leaves you owing $3,000.00 for a car you no longer drive. Gap insurance would pay that difference, the $3,000.00. We see too often people being surprised by these types of situations. Please invest in Gap insurance, at least while you owe more than the value of the vehicle.