As a responsible driver, you are probably aware that all motorists are required to carry a minimum amount of automobile insurance in Tennessee. While purchasing car insurance allows you to cover the costs if you cause an accident, the amount of insurance each driver holds can have a major impact on how much a victim can collect after a crash.
How Do Insurance Limits Apply to a Tennessee Car Accident?
Tennessee is a “fault” state for car accident injuries, meaning the person responsible for causing the accident is legally responsible for paying for damages related to the crash. Since most people cannot afford to pay for accident expenses out of pocket, victims make a claim under the at-fault driver’s insurance company. However, every insurance policy has a limit in place that sets the maximum amount of money the insurer will pay.
To see how these limits affect a crash case, imagine that you are struck by a driver who has a limit of $25,000 per injury and $50,000 per accident—the minimum amount of insurance required under state law. The amount you receive for your injuries and damages may not be enough if:
- There are many people injured. If two people are injured, they may each collect up to $25,000. However, if three or more people are injured in a single crash, they will have to divide the crash limit of $50,000 among them—and no one person can recover more than $25,000.
- The nature of your injuries is severe. Unfortunately, victims are restricted to the amount of coverage the at-fault driver has paid for, giving them little control over the maximum amount they are able to collect. Even if you have sustained life-altering injuries, you are limited to collecting just $25,000.
- You also have minimum coverage. If you and the at-fault driver both have the minimum amount of insurance, you can only recover up to the combination of both of those amounts.
How to Cover Car Accident Costs That Exceed Insurance Limits
Even if an insurance policy’s limits are high, there is no guarantee that the insurer will issue a check for the maximum amount. There are many ways insurance companies will attempt to reduce the amount of coverage, forcing victims to fight for medical and property damage payments they desperately need—and even when this fight is concluded, victims may still fall short on the costs of the crash.
If the at-fault driver’s insurance is not enough to cover your losses, you may seek compensation from:
- Your car insurance policy. Your own car insurance may be used if your accident costs exceed the other driver’s limits. However, Tennessee law requires you to exhaust the other driver’s policy before collecting under your own. For instance, if you purchased $100,000 coverage per injury and the other driver has $25,000, your maximum recovery will be $75,000.
- Your extended coverage. If you have purchased additional forms of insurance, such as collision insurance for damage to your vehicle or MedPay for medical bills, these enhancements can be used to make up accident losses.
- Your uninsured motorist coverage. Even though it is illegal, some drivers do not carry the minimum required car insurance coverage. If you have purchased uninsured motorist coverage, you can recover the full amount of coverage available under your own policy. If the other driver had insurance but it was not enough to cover all of your losses, your uninsured motorist coverage can be used to recover the difference.
- Umbrella insurance. Some policies offer “umbrella” insurance that kicks in when the policy limits for a single event have been exhausted. If you purchased a policy worth $100,000 per accident but also had an additional $50,000 umbrella extension, your total coverage limit would be $150,000.
- Third-party defendants. In many cases, more than one party may be legally responsible for a crash. A bar that over-served alcohol to a driver, an employer whose employee caused an accident in a company car, or the maker of a malfunctioning car part may all be named in an injury lawsuit. Each defendant will have his own insurance coverage, allowing victims to seek payment up to those policy limits.
The injury attorneys at GriffithLaw are proud to provide initial consultations to victims free of charge, and we do not collect any legal fees until your case is resolved. To learn more about your rights, simply fill out the short contact form on this page or request a free copy of our book, The 10 Worst Mistakes You Can Make With Your Tennessee Injury Case.