The price of uninsured motorist insurance is a bargain for Tennesseans, given that some 24% of drivers in Tennessee do not have any automobile liability insurance whatsoever.
What is automobile liability insurance? It is insurance that the owner of a car purchases to pay for losses caused by negligent operation of the vehicle.
Tennessee requires that each car have no less than $25,000 / $50,000 in liability insurance. That means that in the event of a personal injury or wrongful death to a person caused by the negligent operation of the vehicle by the driver the insurance company may be required to pay up to $25,000 to that person. If multiple people are harmed, the insurance company may be required to pay up to $50,000 in damages to all people who are harmed but no more than $25,000 per person.
Uninsured motorist insurance coverage protects a person who is injured by a driver who has either refused to purchase insurance, let an insurance policy lapse, or who has purchased a policy that does not provide enough insurance coverage for the harm caused.
How much does uninsured motorist coverage cost? There are many factors, but what caused me to write this post today was my review of insurance policies of a client who was injured in a car wreck. The driver who caused the wreck only has $25,000 in insurance – an amount that will not cover her medical bills. Fortunately, she had purchased $100,000 / $300,000 uninsured motorist insurance coverage in her vehicle. Under Tennessee law, this means that she will be able to collect $25,000 from the person who caused the harm and up to $75,000 from her own insurance company. (In Tennessee, the uninsured motorist insurance company gets credit for the amount of liability coverage from the negligent driver. This is not the case in all states.)
How much did this $100,000 / $300,000 worth of uninsured motorist coverage cost this young woman? $40 per year. About 11 cents per day. Less than the cost of 16 ounce soda per week. And, as a result, she has $75,000 worth of insurance protection available to her in this accident than she would not have otherwise had.
When your insurance comes up for renewal, ask your agent to tell you what it would cost to increase your liability and uninsured motorist limits to $100,000 / $300,000 and to $250,000 / $500,000. If you have a substantial income or significant assets, you should ask for information about higher insurance coverage.