Middle Tennessee seems to be an ever-growing area of popularity. People from all over the country move to Nashville and the surrounding area for several reasons. Most people however don’t consider the difference in their auto insurance coverage when they move states. They know they need to have it and make sure they get it changed over; but they don’t always pay much attention to how the claims process works should they need to use it.
What States Have No Fault?
Currently there are 12 States which have No Fault auto insurance. If you’ve moved to Tennessee from North Dakota, Kansas, New Jersey, New York, Michigan, Florida, Utah, Hawaii, Kentucky, Massachusetts, Minnesota, or Pennsylvania, then your insurance coverage is now a Tort policy. The limits are often sold in the same or similar increments, so you may not fully realize the difference just by switching policies.
What is No Fault Insurance?
No fault auto insurance essentially means that your insurance pays for your damages and medical expenses no matter who is liable for the accident. An easy example to explain this would be that you’re driving down the road and Sally is sitting at a stop sign waiting to turn. She doesn’t see you and pulls out into the side of your vehicle. You have $3500 in damages to your vehicle and $2500 in medical expenses.
With No Fault insurance, your own insurance policy will pay the total $6000 even though Sally is 100% liable for the accident. No Fault states tend to have higher premiums because at least two insurance companies are paying out every time you have even a small fender bender. Every accident you’re involved in, whether or not you were the cause, is an accident that is recorded on your insurance score.
You are sometimes able to sue in these states if the loss meets a certain threshold. A $6000 accident would not meet that requirement.
What is Tort Insurance?
In a Tort insurance state, a liable party is determined responsible and his/her insurance company would be responsible for the damages to all parties involved.
In the above scenerio, Sally’s insurance would pay out the $6000 to you as well as any damage or medical needs of her own.
There are some instances when the liability can be split. Someone may be 70% liable while the other person is 30% responsible. In those cases, the insurance takes the total loss and splits the payout accordingly between both companies.
For this reason, your uninsured / underinsured portion of your insurance is really important in a Tort state because it unfortunately comes into play in several scenerios.
Have more questions?
If this raised any questions for you regarding how Tort insurance works in Tennessee, I would love to answer your questions. Give me a call today at 615-472-1515 or email me at kaylagulick@tnsig.com. I’m happy to help make sure you understand your policy and have the protection in place you need.
