I meet with customers all the time who really don’t know the meaning of automobile liability insurance and exactly what it does. Basically, liability protects you when you are at fault in an accident.
What are you protecting yourself from?
If you are involved in an accident and the other person is injured, you want to make sure you have enough coverage. You need enough liability insurance coverage to protect your assets so these are not at risk if someone decides to collect damages from you as a result of the accident.
Just think about this. If you are involved in an accident and the other person is injured, how much could they sue you for? What is the value of your assets?
There are situations where you need to have a little more liability coverage than normal. For example, if you have a teenage driver added to your insurance. As most of you know, there is much more risk involved when you have a young driver on your auto insurance policy. In this case, you may want a little more liability coverage than normal.
In the state of Tennessee, you are required to have liability insurance on your car. And there are liability limits in your policy.
The state of Tennessee minimum is $25,000 / $50,000. For example, if you are in an accident and it’s your fault, there is $25,000 coverage on the other driver and if there are two or more people, it’s $50,000. There are also $50,000 / $100,000; $100,000 / $300,000; $250,000 / $500,000 limits.
There is also uninsured motorist liability. If someone hits you, and they do not have any insurance in place. This covers you.
So, it’s important to discuss your liability coverage with your local insurance agent to determine how much liability coverage you need. There is no reason to pay for more than you need, but at the same time, you don’t want to be caught short, putting your assets at risk by not having enough coverage. Would you rather pay a small premium every year for liability coverage or risk losing everything you’ve worked for as a result of having an automobile accident?