06/25/2026
How Much Automobile Insurance Do I Really Need?
Hopefully, anyone reading this is covered by auto insurance that provides coverage if you cause an accident or injury. Liability insurance provides coverage when you, or someone driving your car with your permission, cause property damage or bodily injury to someone. In Tennessee, most of these policies start at the minimal coverage amount of $25,000/$50,000, and then increase to $50,000/$100,000, then $100,000/$300,000, $250,000/$500,000 and beyond. As your coverage increases, so does your premium. The first number shows how much the auto insurer will pay for an injury to any “one person.” The second number reflects how much the auto insurer will pay for any “one accident.” Ask your insurance company to send you your “Declarations Page” if you don’t know how much coverage you have purchased.
If the person injured in a crash has to be admitted into the hospital, their medical expenses could easily surpass $25,000 before they are ever discharged. That could leave you personally responsible for any damages in excess of $25,000. For this reason, most experts will advise that you should carry at least $100,000/$300,000 auto liability coverage, and more if your budget allows.
What happens if you aren’t at fault for a car crash? If someone hits you, doesn’t their auto insurance policy pay? Yes, if they have insurance, but only up to the limits of insurance purchased by the at-fault vehicle owner. That’s why everyone should carry Uninsured/Underinsured (UM/UIM) auto insurance. This insurance provides you coverage over and above the policy limits of the at-fault party. However, your UM/UIM policy will provide additional coverage only to the extent your policy limit is greater than that of the at-fault party. For example, let’s say you’ve purchased $50,000 in UM/UIM coverage. Someone hits you from behind, and you are injured. The at-fault party offers his minimum limits of $25,000. If you can prove your damages are more than $25,000, then your auto policy may pay up to an additional $25,000 for a total of $50,000.
