Practical Advice

Auto accident involving two cars on a city street

Aligning your insurance policy to protect yourself against underinsured drivers 

Most all of us drive a car or a truck, and as part of our responsibility in doing so we are required to have insurance on our vehicles. However, based on my experiences, it is likely that one in five of the cars and trucks you pass every day on the road has no insurance coverage at all. And over the years, I’ve witnessed how financially damaging this can be.

Tennessee is considered an “at-fault” state, which means that the motorist who causes the accident is responsible—both financially and legally—for the resulting injuries and damages. Tennessee’s Financial Responsibility Law ensures that. But of the vehicles that do have insurance coverage, more than 50 percent of them only have the minimum legally required liability coverage: $25,000 per person, $50,000 per accident for bodily injury, and $15,000 for property damage. 

Considering that a simple trip to the emergency room with a broken bone could easily cost more than $50,000, it’s easy to see why these minimums are far too low.

The last time these minimums were increased was on January 1, 2002. The Tennessee Trial Lawyers Association lobbies annually to have these minimums increased to a reasonable amount. Yet despite their best efforts, these dated minimums remain, the reason likely being opposition from the insurance industry lobby.

In speaking to State Senator Richard Briggs, he believes opponents to increasing coverage minimums often rely on the argument that it places an unreasonable financial burden on the working class. But he was quick to point out the reality that the cost of increased insurance coverage is minimal when compared to the true damage that can come when a working class citizen is involved in an accident and the at-fault driver’s insurance falls far short of being able to replace or repair the vehicle, adequately cover medical expenses, and provide for lost income and punitive damages.

So, what do you do to protect yourself against uninsured or underinsured drivers?

The simple answer is that you call your agent and increase your own liability limits to at least $100,000-$300,000, or even better $250,000-$500,000. What this does is ensure you’ll have a better chance of covering your medical bills and getting your car repaired. In addition, consider an umbrella policy of at least $1 million. This type of policy is extra insurance that flows over and provides additional relief if regular insurance coverage is exhausted.

I checked with a local insurance agent, and the cost of increasing your coverage from $25,000-$50,000 to $100,000-$300,000 is roughly about $200 more per year, based on a clean driving record. A $1 million umbrella policy costs around $20 per month. To me, it seems worth the extra money to ensure you and your family are safe on the road.

No doubt the law needs to change. But it will require considerable pressure from the citizens of Tennessee to the legislature to see this law amended. (For a list of your representatives and their mailing addresses, go to Politicians are unlikely to react without constituent input, and there’s no better input than an actual letter. Let’s all take a minute and make our voices heard.  

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