• Anna Bradley

What is minimum liability auto insurance?

You might be asking yourself. "Why do I need car insurance? What is minimum liability insurance? Or what does car insurance cover?" If you are in the state of Tennessee this blog will answer all of those questions!

Bill Nickels Insurance holds an insurance license in the state of Tennessee. Every agent has to have separate licenses for each state they wish to sell insurance. This is because every state has different laws in what minimum liability insurance is required, different costs of living, and different population densities which all affect premium prices (Sims).

Tennessee law requires you to have certain minimum limits for your car insurance.

- $25,000 for each injury or death per accident

- $50,000 for total injuries or deaths per accident

- $15,000 for property damage per accident

This is set by Tennessee state officials, but if you have a lien on your vehicle they may require you to have more than Tennessee's minimums. If a driver does not have the minimum liability insurance for their vehicle they can be fined and/or lose their right to drive a vehicle (TN Gov.).

Now, what does that mean? Here is a scenario, Sally just got a new car and went to her local agent to get insurance. She gets the state minimum liability limits of 25/50/15 and begins driving her car. Sally is on her way to work one day and is running late, she is trying to make up for lost time and doesn't make a complete stop at a stop sign. As she is running the stop sign Tom (who had the right away) gets hit by Sally. This accident is Sally's fault, so she will now have an "at fault accident" on her driving record. Tom is an older man and already had troubles with his left knee but the accident made it even worse.


Tom files a claim to Sally's insurance providers for them to pay for his medical bills. This type of claim will fall under the first split of $25,000 and Sally's insurance provider will cover all of Tom's medical bills up to $25,000. However, if Tom's bills exceed $25,000 then Sally will have to pay out of pocket for the rest of Tom's medical bills.

Continuing on with this scenario what if Tom had his wife, in the car as well? Diane wasn't wearing a seat belt and hit her head on the dash board. Diane was cited for not wearing a seat belt; however, since it was still Sally's fault the accident occurred Sally is still responsible for Diane's medical bills. Now Tom and Diane are both injured which means that claim will fall under the category of "$50,000 for total injuries per accident." Sally's insurance provider will cover both Tom and Diane's medical bills up to $50,000, but if their medical bills end up totaling $60,000 then Sally will have to come up with the extra $10,000.

Since Tom and Diane are now taken care of what about their vehicle? They weren't driving anything extravagant just a 2012 Subaru Outback, but they had just put in a new transmission. They also had their laptops they used for work and Diane's Prada bag that was in the vehicle. The car was totaled, the laptops were smashed and Diane's bag was ruined by the wreck. This is where the third category comes into play, "$15,000 for property damage per accident." Diane and Tom are able to prove ownership of the laptops and bag with prices of them to Sally's insurance provider. The car was also appraised for $10,000 and the total price of their belongings tallied $6,000. This means that the total property damage was $16,000. Sally's insurance company paid their $15,000 and Sally had to pay the remaining $1,000.

This scenario happens everyday and it is why Tennessee State law requires vehicle owners to have car insurance. If Sally didn't have insurance she would have to pay the entire bill out of pocket or Tom and Diane wouldn't have their expenses covered (Unless they had uninsured motorists coverage which is for another time). This hypothetical accident happened in under a minute and could drastically change the lives of all three individuals. Insurance allows us to protect our assets (house, savings, etc.) which gives us peace of mind!

Call Bill Nickels Insurance today if you think you want higher limits! It is always encourage to make sure your limits protect YOUR assets!

Sims, Matthew B. “Why Does Auto Insurance Vary from State to State?” Auto Insurance | Compare Cheap Online Auto Insurance Quotes, 2020, www.autoinsurance.org/why- does- state-auto-insurance-vary-from-state-to-state/.

TN Gov. Services. “Why You Should Have Auto Insurance.” Tennessee State Government - TN.gov, 2020, www.tn.gov/revenue/title-and-registration/drive-insured-tennessee/for-drivers/why-you-should-have-auto-insurance.html.

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