How much car insurance should I buy in Tennessee?

I just moved to Tennessee and bought my first car. I need to purchase car insurance, but I don’t know what I should buy or how I can find affordable coverage. How much car insurance should I buy in Tennessee? How does my driving record affect my rates, and how can I find affordable coverage?

Answer: 

If you own a vehicle in Tennessee, you are required to purchase auto insurance. Each state has certain minimum requirements for auto insurance. In Tennessee, you must have a minimum amount of liability coverage. Liability insurance covers other people’s injuries and property damage if you cause an accident. 

What Are The Minimum Liability Insurance Limits in Tennessee?

A: The minimum liability insurance limits that you must purchase in Tennessee are:

Bodily Injury Liability Coverage

• $25,000 per person injured in an accident
• $50,000 per accident (limit for all persons injured in an accident)

Property Damage Liability Coverage

• $15,000 per accident

What Does Auto Liability Insurance Pay For in Tennessee?

A: Auto liability insurance pays for medical bills and property damage for everyone involved when you cause a car accident. The minimum coverage limit required by the state of Tennessee may sufficiently cover damages from minor accidents. But if you cause a serious accident, you could be underinsured.

What Am I Responsible For in Tennessee?

A: If you cause an accident, you’re responsible for paying for the medical bills for other drivers and their passengers, their vehicle repair costs, and even attorney fees and settlements or judgments levied against you if you are sued for negligence. If these exceed the limits of your Tennessee car insurance, you’d have to pay the rest out of pocket. 

What’s more, liability insurance offers no coverage for damage to your own vehicle, your own injuries, or the injuries of your passengers. If you can afford it, raising your liability limits and adding some options like comprehensive and collision coverage offer you far greater protection. You should also consider purchasing uninsured and underinsured motorist coverage that helps you cover your losses if an uninsured or underinsured driver hits you. 

How does my driving affect my car insurance rates in Tennessee?

A: If you’ve gotten into a car accident, especially one that you’re at fault for, you can expect your Tennessee car insurance rates to go up. That’s because auto insurance rates are based on how risky you are as a driver (how likely the insurance company is to have to pay a claim). Once you’ve caused an accident, your insurance company considers you to be a bigger risk and your rates will go up as a result. Likewise, if you have a history of speeding or other violations on your record, you can expect to pay more than average for your car insurance. 

A recent study from InsuranceQuotes and Quadrant Information Services analyzed the impact of an accident on auto insurance rates on a person who was otherwise considered to be a good, safe driver (middle-aged female, no lapse in prior coverage, good credit score, no prior auto insurance claims). 

The study found that drivers who make a single auto insurance claim of $2,000 or more will see their premiums increase by 44.1% on average. If you file a second claim in the same year, you could see an annual premium increase of 99.4%, on average. 

The National Association of Insurance Commissioners (NAIC) found that the average annual auto insurance premium in the US is $841. A 44.1% increase would equate to $371 per year.

How Does The Claim Influence Coverage in Tennessee? 

A: Premium increases vary by the type of claim, and really only have this extreme impact if you’re at fault for an accident. If you’re hit by someone else, his or her insurance should cover the claim and your rates won't be affected.

It’s also important to note that if you file a comprehensive claim (a claim for damage to your vehicle that results from something other than a collision, such as a fire or theft) your rates might only go up 2% or less. That’s because comprehensive claims generally are caused by things that are somewhat out of your control, like getting caught in a hailstorm or having your car stolen. The weather and theft risks for your zip code and your car model are already built in to your premiums as well. 

What Other Factors Influence My Rates in Tennessee?

A: In addition to your driving record, your car insurance rates are influenced by a variety of other factors, including:

• Your age, gender, and marital status 
• Your credit score
• Your car’s year, make, and model
• The approximate number of miles you drive each year
• The coverage limits, coverage options, and deductibles you choose

How can I find affordable auto coverage that meets my budget in Tennessee?

A: Finding affordable coverage can be difficult if any of these factors are working against you. People with favorable risk factors will find it easier to find coverage that’s perfect for their budget, but anyone can find ways to save. 

• Shop around: You simply might be able to find a better deal from a different insurance company with different underwriting methods. An independent insurance agent can help you get quotes from multiple carriers, so you can be sure you’re getting the most affordable coverage for your needs. 
• Increase your deductible: The general rule for auto insurance rates is the higher your deductible, the lower your premiums. Increasing your deductible should help you save on your Tennessee car insurance premiums. Just be sure that you’re prepared to pay out of pocket for more expenses if you have to file a claim. 
• Improve your credit score: Many insurance companies use your credit score as one method of determining risk. If you can’t do anything about your driving record for a few years, work on improving your credit score. Try to pay off any outstanding debts and address any discrepancies on your credit report. 
• Look for discounts: Most car insurance companies offer a variety of discounts for their customers, including good student discounts, multi-policy discounts for customers who bundle polices, and many more. Your independent insurance agent can help you be sure you’re getting all of the discounts that you’re eligible for, and can suggest ways to qualify for others. 
• Lower your policy limits: It’s not often recommended that you choose minimal coverage limits for your Tennessee auto insurance policy, but if it’s a choice between lowering your limits and not being able to afford coverage at all, buy what you can afford that also complies with Tennessee law. Lowering your coverage limits will definitely reduce your premiums. You can also evaluate whether or not you need to keep optional coverage like comprehensive, collision, and more. If you want to explore this option, it’s best to do it with the advice and help of a local independent insurance agent to be sure that you understand all of the possible consequences.