A good auto insurance policy is a must for every responsible car owner. While it may not be the most glamorous of subjects, it’s definitely one that hangs heavy in terms of safety, finance, and general wellbeing.
Providing services as an independent insurance agency in Franklin, TN gave us the chance to come across a variety of issues surrounding auto insurance policies, most of which stemmed from a simple lack of insurance know-how. For this reason, we believe anyone would benefit from better insurance education, and this guide is a solid first step in the right direction.
We covered most of these topics in previous articles, but we believe that having them all bundled together within a single resource provides a better overall experience for you, our reader.
The quick guide to auto insurance covers the following topics:
- Auto Insurance Basics
- Insurance Rates 101
- Types of Auto Insurance Policies
- Auto Insurance Requirements in Tennessee
- Top Reasons for Auto Insurance Claim Denial
- Auto Insurance FAQ
Auto Insurance Basics
First things first: what is auto insurance and what does it cover? In simple terms, it’s a document that transfers certain risks to a third party, for a fee. The risk is the insured event, the third party is the insurance carrier, and the fee is the insurance premium. Seeing how risk comes in various shapes and sizes, so does auto insurance coverage. You can choose between multiple types of policies, such as:
- liability insurance, which covers bodily injury and property damage caused to another party.
- uninsured/underinsured motorist insurance, that kicks in when the driver who caused an accident doesn’t have enough liability coverage.
- collision insurance, which helps pay for damages caused by hitting objects or vehicles (fences, lamp posts, potholes).
- comprehensive insurance, covering vandalism, collisions with animals, and other similar events that may cause damage to your car.
- gap insurance, which bridges “the gap” between a vehicle’s actual cash value and its loan amount (the difference between how much you owe on the vehicle and how much your vehicle is actually worth today).
In the guide we also discuss why you need auto insurance, how it works, and take an in-depth look at auto insurance quotes, premiums, and deductibles.
Insurance Rates 101
A premium – or rate – is the payment you make to your carrier in exchange for risk coverage. While numerous factors influence premiums, with some being out of your control, others concern you directly and can be easily adjusted.
In the guide we discuss the top factors that influence your insurance rates, so make sure to give it a read if you’re curious what age, gender, and credit card history have to do with your premiums.
Types of Auto Insurance Policies
Have you ever wondered how many types of car insurance are out there? Probably not. But that doesn’t mean you should overlook this topic, particularly if you’re considering changing your auto insurance coverage or provider.
For example, did you there’s such a thing as classic car insurance? This type of coverage is designed with the unique needs of classic and vintage cars in mind. It’s meant to factor in the “agreed value” of the vehicle, which is usually much more than that of a mere “old car”. Due to mileage and depreciation, classic cars may not amount to much in terms of insurance pay-outs, but classic car policies take into account factors such as the car’s condition, the improvements you’ve made to it, and the cost of replacement, all in an attempt to fairly value your vehicle.
To find out more about various types of auto coverage, make sure to read the full guide.
Auto Insurance Requirements in Tennessee
To satisfy auto insurance requirements in Tennessee, you need to carry at least:
- $25,000 of bodily injury liability insurance per person, covering the third-party damages incurred by a single person in the event of an accident.
- $50,000 of bodily injury liability insurance per accident, covering the damages incurred by multiple people in the event of accident where you are the at-fault driver. This limit pairs with the one above, in that your insurance company will pay up to $25,000 in medical bills and expenses for any one person, but not more than $50,000 per accident.
- $15,000 of property damage liability insurance, covering the damages caused to another person’s property – more often than not this goes to repair costs for damaged vehicles.
While liability insurance is the standard approach to meeting auto insurance requirements in Franklin, TN, you can also opt to show financial solvency through bonds or cash deposits.
Specifically, you can:
- post a $65,000 bond with the Department of Revenue, or
- make a $65,000 cash deposit with the Department of Revenue.
Top Reasons for Auto Insurance Claim Denial
Claim denial happens more often than you think, and it’s important to know what causes it, how to prevent it, and how you can fight it.
For example, the first thing you should do if an insurance company denies your claim is to keep calm. You may feel frustrated – particularly if you don’t know what’s causing the rejection – but you should be polite in all your communication with the insurance company. Then, you can:
- Request to receive the claim denial in writing.
- If you believe the company made a mistake, make your case – send photos, eyewitness reports, and whatever other information you possess that could change their mind.
- Contact Tennessee’s Insurance Commissioner’s Office and ask for guidance regarding appropriate next steps.
- Consider getting in touch with an attorney specializing in insurance claims and/or consumer rights.
In the guide we place a special emphasis on the top reasons for auto insurance claim denial and discuss the steps you can take to prevent it from happening to you.
Auto Insurance FAQ
Lastly, we go over an extensive list of auto insurance FAQ so you can cover all grounds and level up your know-how just in time for a policy change.
Enjoy your reading!