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Understanding Car Insurance Quotes

It's easy to forget how wonderful car insurance is until you need it. Car insurance can greatly reduce or eliminate your out-of-pocket costs when an accident occurs, whether it's your fault or not. This is also where it can be confusing, too. What will insurance cover? What policies did you purchase, and what are you responsible for?

To avoid the confusion when you get into an accident, it's helpful to understand your car insurance quote when you purchase it. We're addressing some important car insurance questions today to help you make the best decision for your family.

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What does Tennessee require?

The state of Tennessee requires its residents to carry car insurance. Every state sets their own limits. In Tennessee, you are required to carry bodily injury and property damage liability. It will look like this on your policy quote:

25/50/25 - $25,000 for bodily injury per person, $50,000 per accident and $25,000 for property damage. If you are in an accident and someone is injured, this policy will cover up to $25,000 of bodily injury per person but not more than $50,000 per accident. If property (cars, buildings, etc.) is damaged in the accident, the policy will cover up to $25,000 in damages.

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These amounts can add up quickly when you are involved in an accident. Experts advise customers to carry more than the minimum coverage. You can be held personally responsible for any amounts beyond the limits of your coverage. The courts can rule that your wages be garnished to pay for the additional damages.

Deductibles and policy limits

You will also see deductibles and policy limits on your quote, and you'll need to decide what these will be. The deductible is the portion of the damage you are responsible for. For example, if there is $3,000 worth of damage, but your deductible is $400, then you are responsible for the $400. A higher deductible will cost less every month, but will cost more if you are in an accident.

The policy limits will depend on personal preference and your life situation. Higher limits are great to have, but to someone who wants to save money, this can be viewed as an unnecessary expense.

What are all the policy options?

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Tennessee does not require residents to carry additional policies that could really help you in an accident like uninsured motorist, rental car, comprehensive or collision coverage. Let's look at what these mean and why it's worth it. Let's talk about the basic policies first, then we'll move on to a few that are extras but can be extremely useful.

Liability - Liability coverage is required by law in Tennessee. Liability coverages bodily injury and damages to property when the accident was your fault. Although the minimum is a must, consider increasing your limits as you make more money.

Collision - Collision covers your vehicle if you collide with another vehicle, property, or roll your car over.

Comprehensive - Comprehensive covers damage not caused by a collision or your car rolling over. This can be weather related, hitting an animal on the road, theft, vandalism, etc.

Medical Payments - This coverage will pay for medical or funeral expenses up to your policy limit when you are in an accident. It will also help you meet your healthcare deductible!

Uninsured or Underinsured Motorist - Not everyone has insurance or enough insurance. This covers you in the event of an accident with another driver who does not have insurance at all or not enough liability coverage to pay for the damage.

Rental Car or Travel Coverage - Rental car insurance covers the cost of renting a car while yours is in the shop being repaired.

Emergency Road Service - Roadside service can be costly! This policy will cover service at the scene, towing, delivering of gas or oil, locksmith service and more.

Umbrella Coverage - Umbrella coverage is recommended by experts, especially to customers with high incomes or high net worths. A Umbrella policy will cover any damages above and beyond your other policy limits in the event that someone is injured or dies or if significant property damage occurs. Coverage starts at one million and can be increased to as much as five million. The cost of a policy like this is anywhere from $13 to about $20 per month depending on the insurance company and your family situation.

When should you revisit your quote?

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Car insurance coverage should evolve as your life moves forward and your situations change. Consider revisiting your policy and coverage when you have a new driver, change vehicles, move to a different state or get married. As your income increases, your coverage should also increase to protect your income in case there is a lawsuit. It's a good idea to look at your auto policy every year! Talk with your agent about life events that have occurred and change your policy as needed.

Car insurance can be confusing. Be sure to talk with your agent about what coverage is best for your family and how high the limits should be.

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