Purchasing auto insurance seems like an overly complicated process, but we're here to help clear the air on a few things. One of the most confusing aspects of determining your car insurance rates are the limits on your insurance, and making sure you have enough insurance to legally drive in your state.
Liability insurance is exactly what it sounds like: the amount of money your insurance company will pay in the event of an accident. This is broken into three costs, and is often simplified in a "shorthand" explanation.
The first number is damage to the driver of the other car, if the accident is your fault. The second is to cover injuries to the other passengers involved. The third and final number is to cover damage to the other driver's car. So, if your state minimum is 10/20/10, or rather, $10,000 / $20,000 / $10,000, those are the minimum insurance coverage amounts you need to insure a car in your state.
If you have the above mentioned insurance coverage (which, you can check your state minimum amounts here), and injury costs to the other driver amounted to $50,000, you would be liable for $40,000 and would be responsible to pay that money back. This means your other assets, such as your house, your car, etc., could be used to pay that money back.
In Tennessee, the minimum amount required in auto liability insurance is $25,000 / $50,000 / $15,000, or 25/50/15.
It's a fine line between being over and underinsured. The more liability coverage you have, the more you will pay per month to be insured. However, skimping out on coverage to save a quick buck can be more costly in the case of an accident. It's always best to get multiple quotes, and see what the best insurance coverage for you is. Looking up where you live and drive mostly can help you figure out what is the best coverage, based on the amount of accidents in your city and the amount of drivers surrounding you.
If you have been involved in a car accident involving an underinsured driver, you still deserved to be paid for what you have gone through.
Get more information about Tennessee insurance laws.