Most people understand the purpose of liability auto insurance coverage. If you accidently cause a wreck and injure someone, your liability insurance policy will provide you with an attorney and will protect you up to the amount of your insurance limits. How much auto insurance coverage you need can vary based on your assets and risk tolerance.
Uninsured motorist (UM) coverage is different. It provides money when you are injured by a person without insurance or not enough insurance. For instance, if you are injured by a person with no insurance, your UM coverage will compensate you up to the amount of your UM policy limits. Similarly, if you are injured by someone who has insurance, but not enough to cover your injuries, your policy will make up the difference, as long as your UM policy limits are greater than the other driver's liability policy limits.
For example, if you are injured by a Tennessee driver who has only $25,000 in liability coverage but you have $100,000 in UM coverage, you will have insurance money availabe to you up to $100,000. The first $25,000 will be the responsibility of the negligent driver's insurance company and the next $75,000 will come from your insurance company. If you both only have $25,000 in coverage, then $25,000 is typically the total amount of coverage available to you.
In Tennessee, the amount of liability insurance you purchase is tied to the amount of uninsured motorist coverage available to you. So, if you purchase only a minimum liability policy of $25,000 because you believe you are a safe driver and will never cause an accident, remember that you will only have $25,000 to protect you and your family if an uninsured, or underinsured, driver injures you.
Therefore, even very safe drivers should always obtain more than the minimum coverage. Also, if your insurance agent suggests that you waive uninsured motorist protection, think twice. Although Tennessee law technically requires all drivers to have $25,000 as a minimum amount of liability insurance, this law is not enforced properly and a very large percentage of drivers on the road have no insurance at all. We believe you should never waive uninsured motorist coverage and should always carry more than the minimum amount required by law. Here's why:
We represented a young man who sustained serious injuries in a car crash. His medical bills alone totaled $100,000, but the driver of the other vehicle had no insurance and no assets to pay for the damage. Unfortunately our client only had $25,000 in UM coverage. Needless to say, he was left holding the bag.
If you don't fully understand your auto insurance policy contact a one of our Memphis auto accident attorney for a free consultation. We can be reached toll free at 888-470-9143.