What is Car Insurance and Why is it Important in the State of Tennessee?

Many people, when asked if they know what insurance is, can rarely answer correctly. We've all heard about it and carry it because often times it is required, but we don't all understand it. As a licensed Property and Casualty Insurance Producer, in the State of Tennessee, I am qualified and feel responsible to help people understand exactly what car insurance is, and why it is important.

Insurance is defined as transferring risk from an individual to a group. A risk is defined as something that may cause a loss of valuable property. Very simple examples of valuable property are but not excluded to: homes, vehicles, recreational vehicles, commercial equipment, and believe it or not, human life. Insurance companies exist to help their policy holders and their families protect their valuable property (also known as assets)from unexpected events like car accidents, tornadoes, earthquakes, storms, fires, and even death. This just basically means that a person who pays for insurance is planning a head of time for the unexpected, by protecting their insurable assets. Insurance companies can make all of this possible by collecting money from a group of people and then paying it out to those who need it after a loss.

Insurance is very important because it helps people return to the way their lives were before their catastrophe happened. This is called: Indemnity. It is also very important because it protects the insureds' assets. Insurance companies are held responsible for deciphering what coverages each individual needs according to their own financial positions and insurable interests and/or assets. Obviously, someone with more property needs more insurance.

In the State of Tennessee it is required by law that drivers of automobiles carry car insurance. It is illegal to drive with out car insurance. If a driver gets caught driving with out car insurance, in the State of Tennessee, they are going to end up with a ticket, a court date, and maybe some time in jail. Uninsured drivers have to pay a fine, go to court, pay a lawyer to represent them, pay a court fee, and probably have to miss several days of work to take care of all of these things. Aside from the legal issues that uninsured drivers have to handle against the State, there are many sue happy people who know several phone numbers to sue frenzied lawyers that advertise: "More money for your injury claim." Car insurance helps pay for repairs to vehicles in accidents, disasters, catastrophes, and many other unfortunate situations that may occur. This type of insurance also covers property damage caused in an accident, road side service, as well as bodily injury, medical bills and court costs. Car insurance serves as a buffer of compensation to protect the drivers' personal assets from being sued out of their possession, but also is in place to return the insured driver and other party involved in an accident to a state of indemnity. However, insufficient coverage limits set by the insurance company for the insured driver could still land the driver in court at their own expense.

Wouldn't you feel safer and worry free if you were carrying a sufficient amount of Car insurance. . . if you aren't already? In my professional opinion, if you are not carrying car insurance, you need to get it, and if you already have it. . .you need to make sure that you have sufficient coverage so that all of your assets are protected and not in danger of being sued away.