The Danger of Cut-Rate Car Insurance - Flexer Law

The Danger of Cut-Rate Car Insurance

It’s hard to get through a day without being hit by multiple ads from car insurance companies, touting low rates and state minimum coverage. Billboards, television advertisements, radio spots, internet pop-up ads—these companies are everywhere, and it’s easy to be tempted to save some money. But the wrong coverage can cost you in a big way.

Cut Rate Auto Insurance

Many of the cut-rate insurance companies will try to avoid issuing a policy that includes uninsured and underinsured motorist coverage. This coverage is commonly referred to as “UM/UIM,” and it can be obtained for both property damage and personal injury coverage. This coverage is so important that Tennessee state law dictates that, to waive this coverage, you have to sign a separate agreement waiving it.

Unfortunately, “signing” in this day and age may be as simple as checking a box on an online insurance application.

It gets even worse, though, because once you have waived coverage the first time, that waiver is valid for future policies. Now you might think, “Tennessee has mandatory auto insurance coverage. I don’t need that extra cost.”

Well, you would be wrong.

Uninsured Drivers in Tennessee

Various surveys and studies place Tennessee as 6th overall among the states for the highest rate of uninsured drivers, somewhere between 20 and 24%. That’s right, 1 in 5 drivers in Tennessee is uninsured.

What’s so important about this type of coverage? If you’re injured in a collision with one of these uninsured drivers, your uninsured/underinsured coverage steps into the shoes of the at-fault driver when it comes to paying your claim or paying damages in the lawsuit—up to the amount of your insurance policy limits. UM/UIM even provides coverage when a household member is in another person’s car or even a pedestrian.

Emergency room bills are often thousands and even tens of thousands of dollars. If you have cut-rate insurance, you may find yourself financially devastated by an automobile collision, even one that wasn’t your fault.

Nashville Personal Injury Lawyer: Fighting for Fair Compensation

Every day I fight with insurance companies to get my clients fair compensation for injuries and property damage they receive as a result of a collision. We have received many “policy limit” settlements over the years, and in each instance, I have always been struck by how little our state’s minimum limit of $25,000 really leaves for a client after payment of medical bills.

If you think your health insurance will cover those bills, you are in for a rude surprise. Most health insurance companies are entitled to “subrogation,” which is repayment from the money you receive from a third party. It can take the entire settlement in some cases.

You can only get UM/UIM coverage in an amount equal to or lesser than the amount of liability coverage you carry. If you get cut-rate insurance, if you accept minimum limits to save a few dollars, you might be making a huge mistake.

If you have any questions or concerns about getting a settlement from an accident you were in, call me today at 615-255-2893 for sound advice from an experienced personal injury attorney.

Tennessee Personal Injury Office Locations