Many Tennessee drivers hold a common belief that increasing their auto insurance liability limits will dramatically raise their premiums. It’s easy to assume that more coverage = a lot more money. However, this is largely a myth. In reality, higher liability limits often cost just a little more – sometimes only a few dollars a month – while offering significantly better protection. In this article, we’ll debunk the “high coverage, high cost” myth using Tennessee-specific data, comparisons, and real examples. By the end, you’ll see why upgrading your coverage doesn’t always mean a budget crunch, and how working with an informed insurance agent can help you find the best value.
Tennessee law requires drivers to carry at least 25/50/25 in liability coverage (that’s $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 for property damage). These state-minimum limits are set to keep insurance affordable, but in truth, they are quite low – often too low to fully cover you in a serious accident. In fact, Tennessee recognized how outdated the minimum property damage limit was and raised it in 2023 (from $15,000 to $25,000). This change acknowledges that $15k wasn’t covering the cost of modern vehicle repairs. Even after this increase, the minimum required coverage can still fall short given today’s accident costs.
Why are these minimums considered insufficient? Consider that in 2023 the average auto liability claim for property damage was about $6,551, and for bodily injury it was around $26,501. Tennessee’s per-person injury minimum ($25,000) is actually below the national average injury claim. In other words, an average injury accident could exhaust your minimum coverage. And of course, many crashes cost far more than “average” – medical bills and vehicle repairs have been rising rapidly in recent years. If you only carry minimum limits and cause a major accident, you could be on the hook for huge out-of-pocket costs once your insurance maxes out. (For example, causing severe injuries can lead to claims in the hundreds of thousands of dollars or more – costs that minimum 25/50/25 coverage would never fully cover.)
The bottom line: Tennessee’s legal minimum is just a starting point. It keeps you legal on the road, but it might not keep you financially protected. This is why experts and the Tennessee Department of Commerce & Insurance urge drivers to consider higher liability limits than the bare minimum. The good news is that upping those limits usually isn’t nearly as expensive as people fear – as we’ll show next.
There’s a persistent myth that carrying higher liability coverage will significantly drive up your insurance premium. Many assume that doubling your coverage might double your rate. In reality, that’s not how it works. Insurers base premiums on a variety of factors (your driving record, vehicle, location, etc.), and the difference between, say, a $25,000 limit and a $100,000 limit is often surprisingly small. In fact, most insurers let you buy higher liability limits “often without much increase in your premium”.
Let’s break down the numbers to see myth vs. reality on cost increases:
Nationwide data: On average across the U.S., raising your liability coverage from state minimum to a 50/100/50 policy (i.e. $50k per person/$100k per accident for injury, $50k for property damage) costs only about $122 more per year. That’s roughly an extra $10 a month – basically the cost of a couple of drive-thru coffees. This is a far cry from a “sky-high” premium increase. It’s a minimal bump for doubling or tripling your coverage limits.
Tennessee specifics: Tennessee drivers see even smaller jumps in many cases. A recent analysis found that boosting liability from the 25/50/25 state minimum to 50/100/50 in Tennessee raised the average premium from about $368 to $445 – an increase of just $77 per year (approximately 21% more). That works out to about $6–7 a month for a substantially higher level of protection. Only a ~21% increase in cost for double the bodily injury coverage and 200% more property damage coverage is a great trade-off when you consider the peace of mind it buys.
As you can see, higher limits don’t translate to a proportionally higher bill. The myth that “you’ll pay a lot more” is not backed by the data. In reality, the premium difference is often modest – and definitely worth the added protection. Even going beyond 50/100 to much higher limits (like 100/300 or 250/500) tends to be cost-effective. Each step up provides exponentially more coverage for what usually amounts to a relatively small incremental cost. (Your agent can show you options; you might be surprised how affordable a higher limit or even an umbrella policy can be in Tennessee.)
Sometimes, the best way to debunk a myth is to see real side-by-side comparisons. Let’s look at some example quotes and scenarios that illustrate how minimal the price difference can be:
Tennessee Quote Comparison: In one rate study, a sample Tennessee driver’s minimum coverage policy averaged about $368/year, while a 50/100/50 liability-only policy for the same driver was about $445/year. That’s the $77/year difference we noted earlier – only ~$6.40 per month more for significantly better coverage. It’s clear that doubling the coverage limits did not double the premium. It’s a small increase for a big upgrade in protection.
Carrier-to-Carrier differences: Prices can vary by insurer, which means with smart shopping you might get a higher coverage policy from one company for the same cost (or less) than a bare-bones policy from another company. In fact, an analysis found that some companies’ quotes for higher limits were lower than what other companies charged for state minimum coverage. For example, imagine you’re paying about $550 a year for minimum coverage with one insurer. By comparing rates, you might find another carrier that offers you, say, 50/100 liability limits for under $450 a year. Yes – you could pay less and get more coverage by switching to the right company. This isn’t just a theoretical scenario; it happens in practice when drivers shop around.
Progressive, GEICO, and Travelers examples: As an independent agency, we represent major carriers like Progressive Insurance, GEICO Insurance, and Travelers Insurance, and we often see how they price out higher limits. In a 2022 comparison, each of these companies showed only modest premium increases when bumping up liability coverage. For instance, GEICO’s sample quote for state minimum coverage was about $326/year, and increasing to a 50/100/50 policy raised it to roughly $423/year – only a $97 difference annually. Travelers displayed a similar pattern: about $531/year at minimum limits versus $642/year for 50/100/50, a difference of roughly $111 (under $10 a month). Even Progressive, which had a slightly larger gap in that data set, went from approximately $551 (minimum) to $682 (50/100/50) – about $131 more per year, or ~$11 a month. These differences are relatively small. To put it in perspective, $8–$11 a month is basically the cost of one lunch outing – a trivial amount for the added financial security of higher limits.
It’s worth noting: because each insurer’s pricing algorithm is different, one company might offer a particularly good deal at higher coverage levels. The data above highlighted that, for example, GEICO’s higher-limit premium (~$423) was not only low in absolute terms, but also lower than what some other insurers charged for minimum coverage. This reinforces that shopping around pays off. You might save money and get better coverage by finding a carrier that favors higher limits in its pricing.
A real-life scenario: To personalize this, consider a Nashville driver named Alex. Alex had the state minimum 25/50/25 policy and was paying about $45 per month. He feared that increasing his coverage would push his bill over $60 or $80 a month. After talking with an agent, Alex was shown a quote from GEICO Insurance for 100/300/100 coverage that came out to about $48 per month – only $3 more than he was already paying! The agent also got a quote from Progressive Insurance around $50 per month for similar higher limits. In the end, Alex chose the policy with higher limits and now sleeps better at night, knowing one serious accident won’t bankrupt his family – and it only cost him a few dollars extra. (This example is illustrative, but it mirrors many real stories where drivers upgrade coverage for just a negligible cost difference.)
The takeaway from all these examples is clear: higher liability limits often come at a bargain price, especially in Tennessee’s competitive insurance market. You won’t always see the exact same numbers (every driver’s situation and each company’s rates differ), but it’s very common to find that the price jump is far smaller than expected. In some cases, you might even pay the same or less by switching to a carrier that offers a better deal for the coverage you need.
Given that affordable high-limit options are out there, the challenge is just finding them. This is where working with an experienced insurance agent can make all the difference. An informed independent agent (like our team here in Tennessee) knows the ins and outs of various carriers’ pricing. We represent top companies including Progressive, Travelers, and GEICO, among others – and we can compare their offerings side by side on your behalf.
Why is this valuable? Because an agent can bust the myths and show you the facts on paper. Rather than assuming it’s too expensive to raise your limits, you can see actual quotes tailored to you. Often, we’ll quote a client’s policy at state minimum and then at higher limits; nine times out of ten, the client is shocked at how little the difference is. It’s not uncommon for us to find a scenario where, say, Travelers Insurance can offer a policy with double the coverage for only a few dollars more than another carrier’s basic policy. We’ve even seen cases where the client ends up paying less for more coverage by switching to a different company that has better rates for higher limits. Without an agent’s insight, you might never discover that opportunity.
Additionally, an agent brings local Tennessee knowledge. We understand the specific risks here (like the growing accident rates in Nashville, or the storm damage in parts of the state) and can advise why higher coverage is wise. We also stay updated on state insurance trends – for example, knowing that Tennessee’s average insurance premiums are below the national average (minimum coverage here costs about 23% less than the U.S. average). That means there’s often more room in many Tennesseans’ budgets to increase coverage, since our base rates are relatively lower. An agent can leverage such factors, finding you discounts and balancing coverages so that you get maximum value for your premium dollars.
Finally, an agent serves as your advocate. If you’re still on the fence about raising your limits, we can walk you through “what-if” scenarios – what if you have a major claim? what if you get sued after an accident? – and how having higher liability coverage (or an umbrella policy) would protect you. Seeing the risk vs. cost clearly makes it a no-brainer: paying a few extra dollars a month now is well worth avoiding potentially hundreds of thousands in debt from an uncovered claim later. Your agent’s job is to make sure you’re properly covered and that you’re getting a great deal on that coverage.
For Tennessee drivers, the idea that “higher insurance limits will empty your wallet” is one myth that needs to be put to rest. We’ve seen that many times the price increase for better coverage is minimal – and in some cases, you might even get a better rate with a higher limit policy by choosing the right insurer. With accident costs rising and the state minimums being relatively low, carrying only the minimum liability insurance is a risky gamble. For just a few dollars more per month, you can often greatly expand your protection and safeguard your finances.
The key is to stay informed and shop smart. Don’t hesitate to ask your agent for quotes at higher limits, and don’t assume you can’t afford it until you see the actual numbers. As we’ve shown, the data frequently tells a different story than the myth. Working with an informed insurance agent can uncover the best deals from carriers like Progressive, GEICO, Travelers and more, ensuring you get the most bang for your buck in coverage.
In the end, increasing your auto insurance liability limits is about protecting what matters – your home, your savings, your family’s future – without significantly impacting your budget. It’s one of the best investments in peace of mind you can make as a driver. So next time you review your policy, remember: higher limits don’t always mean high costs. In Tennessee, you might be pleasantly surprised at how affordable optimal coverage can be. Reach out to your local agent (we’re always here to help) and let them help you find that sweet spot of greater protection for minimal cost. You’ll be glad you did the day it matters most.
Sources:
Tennessee Department of Commerce & Insurance – “A Consumer’s Guide to Auto Insurance” (NAIC)tn.gov.
Insurance.com – “How much does it cost to increase your auto insurance liability limits?” (2025 data analysis)insurance.cominsurance.cominsurance.cominsurance.cominsurance.com.
Bankrate – “Tennessee Car Insurance Laws (2023 Update)”bankrate.com.
Insurance Information Institute – Facts & Statistics: Auto Insurance (2023 average claim figures)iii.org.
HFC Insurance Blog – “Losing Everything Due to Inadequate Auto Liability Coverage” (Why higher limits matter)hfcbenefits.com.
Insurance.com – “Tennessee car insurance laws and requirements: 2025” (Expert commentary on raising limits)insurance.com.