INSURANCE FAQs

Definitely, yes! Title insurance protects the buyer from liens and other claims to ownership that may surface after the buyer has purchased the property. This coverage should be discussed with your real estate agent and the title attorney who prepares the closing documents.

Umbrella insurance increases the limits of liability on both your homeowners and your automobile policies. The umbrella policy kicks in only after the underlying limits of liability are exceeded. Liability insurance is not expensive and offers excellent additional protection in the event of a catastrophic accident for both the person responsible for the accident and the victim in the accident. I highly recommend that everyone have at least a $1,000,000 umbrella policy as a safety net.

My recommendation is to get the highest limits that you can afford, and I encourage my clients to get either 100/300/100 or even better 500/500/500. Stay away from the TN state minimum limits of 25/50/15.

It really means $100,000/$300,000/$100,000. The first number is the limit the insurance company will pay for bodily injury per person per accident. The middle number is the limit the insurance company will pay for all the bodily injury expenses for all the injured persons in an accident. The third number is the total amount an insurance company will pay to repair the damages to the car of the driver who is not at fault in the accident. Other damaged property in an accident like a guard rail, fence, bridge, building, etc. is also covered by this limit.

Two comments:

1) If a driver has the limits of 100/300/100, $100,000 is the total amount the insurance company will pay per injured driver. If there is only one person injured with $300,000 of injuries, the insurance company will only pay $100,000 for those injuries.

2) A driver responsible for an accident is responsible for any and all damages that exceed the limits of liability. In the above situation where an injured driver has $300,000 worth of injuries and the driver at fault has only $100,000 limits per person per accident, the at fault driver is responsible for the unpaid $200,000.

Homeowners insurance covers replacing your home if it is partially or totally destroyed by fire or storm. It also covers replacing your personal contents if they are lost in a damaged home or stolen. The other major coverage in a homeowner’s policy is personal liability. If you or a member of your family accidentally causes bodily injury or property damage to another person or persons, either on your own property or at another location, this coverage will pay for these expenses and for your defense if you are sued.

Other coverages include protection for structures on your property that are separate from your home, like a detached garage; additional living expenses if your home is partially damaged or totally destroyed and you have to temporarily move to another location; and medical payments to other people who suffer relatively minor injury while on your property.

Some policies do cover renovations, most do not. A Builders Risk policy protects building materials that have been delivered to your home but have not yet been used. It also protects partial completion of a project before the whole project is completed and can be covered by your homeowner’s policy. Another very important factor in this situation is liability. The homeowner can be held responsible if a neighbor or someone else is injured while walking around your project. Another worse case scenario is if a child is injured on the site or is injured by any vehicles approaching or departing from your renovation project.

All drivers need and must have automobile insurance. Teen drivers do not need their own individual policy. It is much less expensive and more practical for the teen driver to be listed as a driver on his/her parent’s/parents’ policy.