Nashville insurance insight: What liability limits should the average driver carry?
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I find that most drivers, when shopping for car insurance in Nashville, are focused on their car and on fulfilling Tennessee’s basic requirements. They’re making sure they have the coverage they need to repair or replace their daily transportation, and making sure they’re legal. Basic, simple.
But I’d argue that your biggest concern as a Nashville driver — and the biggest value your car insurance policy provides — is liability. Even a nice car usually maxes out in the tens of thousands. A serious liability situation — though unusual — can zoom well past that.
So I’d encourage you to think about your liability insurance not as an afterthought or a basic requirement, but a key part of protecting your assets.
Minimum car insurance coverage required in Tennessee: a starting point
If you’re not sure what kind of liability coverage you have on your current auto insurance policy, here’s a little help decoding it. (If you’re my client, and you ever have any questions, I’m always a call/email away, and happy to answer.)
The part of your policy outlining your liability coverage usually expresses it in three numbers, like this: 25/50/15.
Those represent three different limits. Your policy, with the numbers listed above, would cover up to:
$25,000 for injuries per person
$50,000 for injuries per accident
$15,000 for property damage per accident
Coincidentally, the numbers above are also what you need in terms of liability coverage to stay legal as a Tennessee driver.
Likelihood of a major claim
I’m an independent Nashville insurance agent, so I talk insurance all day, every day. But I’m not in the habit of encouraging my neighbors to buy more coverage than they need. Mostly, I like to consider their individual financial situation and needs, and arm them with facts that can help toward decision-making.
Here’s a little data about car crashes in Nashville: They’re alarmingly common, but most liability claims that result aren’t astronomical.
In an average year in Davidson County, there are about 30,000 car crashes. Which is, obviously, a frustrating and frightening number. The crash rate here in 2016 was also the highest in Tennessee by far — almost 150 percent higher than neighboring counties like Williamson to Sumner. (The chart above is from the Tennessee Highway Safety Office.)
That said, data from the Tennessee State Comptroller’s office shows that most crashes here that result in claims are on the lower side: “Eighty-six percent of bodily injury claims were less than $25,000; 95 percent were less than $50,000. Ninety-six percent of property damage claims were less than $10,000.” (It’s slightly outdated data, but the general idea sticks.)
Liability claims are on the rise nationwide, though — the average cost grew over 2005 to 2013 from $11,738 to $15,506, which is a massive 32.1 percent jump.
What’s all that data add up to? Statistically, we’re fairly likely to get into a crash in Nashville, but it’s not too likely a liability claim will soar past the Tennessee minimums.
What’s the right level of liability coverage?
Here’s the basic breakdown: If you’re in a crash that’s your fault — or it’s unclear whose fault it is — your liability insurance coverage will kick in for costs ranging from medical expenses and loss of income for the other driver to a neighbor’s fence that was knocked down in the crash.
If claims exceed your coverage, you’re on the hook for the remainder.
As far as how much liability coverage is ideal for you, the answer depends on a lot of things specific to you, but I tend to focus largely on assets.
If you’re just coming out of college and your assets are minimal, state minimums will probably do the job just fine. But your parents — assuming they own a home, have some savings, investments, etc. — would probably want to go further, with enough liability coverage to wrap a security blanket around those assets, even if the possibility of needing it isn’t highly likely.
The way I always think about it: In a city like Nashville, it doesn’t seem that far-fetched to imagine T-boning a Platinum-selling singer in a Porsche.
Additional liability protection usually doesn’t come with an unruly rate increase — especially if you’re considered “preferred risk.” You can also always opt for an umbrella policy that bolsters your overall insurance coverage, and fills in any gaps you might have.
Any questions/concerns about what kind of auto insurance policy is right for you in Nashville? I’m always happy to help. Call or email Tucker Coverage here.
If you’d rather start the process of checking out your possibilities online, you can grab an online car insurance quote here.