How Much Auto Coverage Do I Need?

September 2, 2022

How much auto insurance do I need in Tennessee?

The importance of buying enough auto insurance

When it comes to car insurance, purchasing enough is the name of the game. Without enough coverage, you could end up on the hook for paying tens of thousands of dollars out of pocket in an at-fault collision. 

So how do you determine how much coverage you need? If it seems complicated, know you’re not the first person to think that. “Is a 25/50/25 policy enough or do I need to fork over higher premiums for more liability coverage?” “What do those numbers even mean?” “Does being a responsible car owner really require this much math?”

Buying auto insurance can definitely seem intimidating at first, but don’t worry—it’s a whole lot more straightforward than you might think! This article will break down the basics you’ll need to know to be an informed customer when shopping for liability auto insurance in Tennessee.


What do the three numbers mean in 100/300/100?

Let’s get down to brass tacks: the three numbers represent liability coverage limits. For example, in a 100/300/100 policy, your coverage includes $100,000 for bodily injury liability per person, up to $300,000 for bodily injury per accident, and $100,000 for property damage liability for an at-fault accident.

These coverage limits are what your insurance will pay. For example, suppose your car hits another vehicle in an at-fault accident and causes $60,000 in damage. In that case, your insurance will pay the full $60,000 since you are covered up to $100,000 in property damage liability. If the damage had been $140,000, your insurance would pay the full $100,000, leaving you to cover the remaining $40,000.

Of course, that’s assuming you have a 100/300/100 policy. In a 25/50/25 state minimum auto policy, your premiums may be cheaper, but you’ll have to pay much more if you end up causing more damage than your policy covers.

With a 25/50/25 policy, if you were to cause $60,000 in property damage to someone else’s vehicle, your insurance would only cover $25,000 of the damage, leaving you to cover the remaining $35,000 yourself.


What kind of auto insurance is required for Tennessee drivers?

In Tennessee, drivers are required to provide proof of financial responsibility, which most people do by purchasing liability automobile insurance. A liability automobile policy only covers other drivers and their property when you are at-fault. Liability policies protect you from paying the full cost of expensive vehicle repairs and medical bills to the other party if you cause an accident.

In Tennessee drivers are legally required to maintain a 25/50/15 liability policy (25/50/25 beginning in January 2023) or otherwise meet financial responsibility requirements under state law.  


How much is enough insurance?

As mentioned in the previous section, Tennessee only requires 25/50/15 liability insurance today to meet its financial responsibility requirement. However, more coverage than the minimum requirement may be necessary to ensure your assets and income are protected if you were to ever cause an accident.

When deciding what limits to choose, remember that you may have to pay for medical expenses and the other party’s vehicle repair costs if you are at-fault in an accident and don’t have enough automobile liability coverage. The last thing you want to do when shopping for insurance is underestimate the cost of a collision.


I’m on a budget. What coverage do I really need to pay for?

Sticking to a budget is a great way to save money and achieve your goals. Even when you’re in saving mode, keep in mind that it’s one thing to cut down on eating out, but it’s another to not have enough automobile liability insurance. When it comes to the risk of being responsible for damage from an automobile accident, insurance should be high on your list of necessary budgeting items.

For an average budget, you may consider a 250/500/250 or a 100/300/100, and for those on a tighter budget, you may choose a 50/100/50 or 25/50/25 policy. Of course, the ideal scenario would be that you’d never need to use your policy, but it’s worth remembering that you take a risk every time you choose to get behind the wheel. Even if you take precautions and use best practices while driving, some factors are simply out of your control.

If you ever end up in an accident where you are deemed at-fault and asked to pay up, you’ll thank yourself for investing in a higher limit policy.  In an expensive accident, higher premiums simply can’t compare to the potential cost of a five or six-figure bill that you are expected to pay out-of-pocket.


What other types of auto insurance should Tennesseans consider?

As important as it is to purchase enough liability insurance to cover the damage you might cause to others and their property in an accident, you also need to consider whether you can pay out of pocket if a tree branch falls through your windshield or an uninsured/underinsured driver hits your car—which is not ideal.

Below are some of the other types of insurance you may want to consider purchasing to stay as protected as possible on the roads:

  • Comprehensive – Buying comprehensive (other-than-collision) coverage insures your vehicle against damage from lots of things that are not your fault—from vandalism to falling tree branches.
  • Collision – Collision covers damage to your vehicle in case of an accident where your vehicle collides with another object/vehicle.
  • Uninsured/underinsured motorist coverage – Uninsured/underinsured motorist insurance covers you if you are hit by a driver who doesn’t have insurance or does not have enough insurance for your damages. This coverage is very important in Tennessee since more than 20% of drivers in Tennessee don’t have auto insurance.
  • Medical payments coverage – Medical payments coverage provides a limited amount of medical expense coverage for you and other people in the car in case of an accident.


Looking for car insurance in Tennessee? 

If you are in Tennessee and looking to insure your vehicles, contact your local Farm Bureau Insurance agent for a free quote! They’ll be happy to answer any questions you might have.

Posted in Auto