Tennessee guide to home insurance.

Tennessee is best known for musical roots and cowboy boots. Yet, according to a 2018 survey from WalletHub, it isn’t all line dancing and whiskey tasting. Using a range of statistics from the US Census Bureau, FBI, National Highway Traffic Safety Administration and Centers for Disease Control and Prevention, Tennessee was declared the twelfth most dangerous state in America. Considering the significant increase in natural disasters that broke historical averages in the last several years, we don’t disagree.

The recent surge of hail storms, tornadoes, flooding and wildfires makes it even more important for homeowners in the Volunteer State to purchase a home insurance policy. In fact, most mortgage lenders require it. Standard policies cover dwellings, additional living expenses, liability and personal property (up to a certain limit). There are, however, some variations depending on your provider and the location of your home.

It’s important to understand the details of your policy so you know whether your home, possessions and loved ones are sufficiently covered in case trouble strikes. Since different states have different risks and regulations, we created an insurance guide with information and resources just for Tennesseans.

Supplemental insurance needs in Tennessee

Thanks to its geographical location and diverse topography, Tennessee is vulnerable to a number of events that aren’t always covered by basic insurance policies. Even some covered perils can lead to financial trouble if you aren’t careful about the details. You may have to buy separate policies and endorsements to protect yourself.

Tennessee is located in what meteorologists refer to as Dixie Alley, which is a hotspot for tornadoes, especially during late winter and spring. In fact, Tennessee is a top state when it comes to the number of tornadoes in the…CLICK TO TWEET

Tennessee is located in what meteorologists refer to as Dixie Alley, which is a hotspot for tornadoes, especially during late winter and spring. In fact, Tennessee is a top state when it comes to the number of tornadoes in the month of February. When moist air from the Gulf of Mexico mixes with cooler air from the northwest or the upper-level jet stream from the west, Tennesseans are at risk. Wind damage is covered by most policies, but that isn’t always enough.

Portions of western Tennessee fall along the New Madrid Seismic Zone, which is a source of earthquakes in the southern and midwestern US. Standard policies don’t include coverage for earthquakes, necessitating a separate, earthquake-specific endorsement or policy. You can check seismology maps on the United States Geological Survey website to assess your actual risk, but many Tennessee homeowners should expect to pay that extra premium.

As idyllic as they are, the state’s lakes and rivers do flood. Even though it’s landlocked and doesn’t experience frequent hurricanes, Tennessee does get saturated with rain from severe tropical and hail storms. You can check flood maps on FEMA’s website to assess your flood risk and work with your insurance agent to purchase a National Flood Insurance Program (NFIP) flood policy from the Federal Emergency Management Agency (FEMA).

Fires are more rare than earthquakes, floods and tornadoes, but they’re becoming more common, as with other extreme weather incidents. Though providers usually include coverage for the loss and damage of fires, that doesn’t always mean you’ll get a big enough payout to fully reconcile and rebuild. Since the fifth costliest wildfire in the US occurred in Tennessee, some homeowners may feel more comfortable investing in supplemental coverage.

The US Geological Survey also warns that the most damage from sinkholes, which typical policies generally exclude, occurs in Florida, Texas, Alabama, Missouri, Kentucky, Pennsylvania and Tennessee. Plus, a new report from the Federal Trade Commission (FTC) found that Tennessee has the tenth highest rate of fraud per capita of any state, consisting mostly of debt collection, imposter scams and identity theft. It’s important to thoroughly investigate whether your policy includes these specific risks.

Tennessee insurance laws

Tennessee law stipulates that your insurance company must promptly acknowledge, investigate and pay out or deny your claim within a reasonable time after you have notified them of a loss. They must act reasonably and try to settle all covered claims fairly.  

There are also specific rules regarding how an insurance company can cancel your policy in the state of Tennessee. Most homeowners won’t have to worry about this, but there are a few instances that warrant the move, such as: failing to pay premiums, committing insurance fraud, getting convicted of a crime, altering your property so it is unsafe and making changes to the house that render it uninsurable. In these cases, an insurer may cancel or not renew a policy after providing adequate notice and a legal reason for their action.  

A unique aspect of insurance coverage In Tennessee is that private adjusters are not licensed. In fact, they aren’t required to have any training. Public adjusters, though, have to pass a written exam to earn their license. Another benefit of using a public adjuster? Their fees are capped at 15% of the loss amount for residential losses.

Public adjusters in TN have to pass a written exam to earn their license. Another benefit of using a public adjuster? Their fees are capped at 15% of the loss amount for residential losses.CLICK TO TWEET

There are a few other insurance laws Volunteer State homeowners should be aware of. For one, according to the Tennessee Code 56-7-130(b), providers are required to offer coverage for sinkhole losses. It doesn’t mean that sinkhole loss coverage is included in every policy, but insurance providers have to make the coverage available — even if it comes at an extra cost.

recent Tennessee Department of Commerce and Insurance (TDCI) announcement about the issue of bundling umbrella and personal line policies is also important to consider. The Department has ruled that requiring a consumer to maintain an underlying personal lines policy to obtain or renew an umbrella policy is permissible, but that an insurer may not require a consumer to apply for an umbrella policy in order to purchase or renew personal lines coverage. 

To learn more about your insurance rights in Tennessee, visit the Tennessee Insurance Litigation Blog and read the full text of the Unfair Claims Settlement Act of 2009.

Average homeowners insurance costs in Tennessee

Determining how much you should pay for homeowners insurance isn’t always easy. Policies tend to be more expensive in areas that are more susceptible to disasters and have higher home values. The Insurance Information Institute reports that as of 2015, Tennessee residents pay an average premium of $1,149 — just below the national average of $1,173.

Unfortunately, some Tennessee companies have raised their rates, increased minimum deductibles, reduced coverage for wind and hail events and forced home and auto package policies in the wake of recent disasters and the subsequent increase in claim severity and repair costs.

To save money on your homeowners insurance bill, check out some common insurance discounts and speak with your provider to see if you qualify for any of them. You can also take up some home improvement projects to lower your premiums further. And when your policy is up for renewal, be sure to review it thoroughly. It’s never a bad idea to comparison shop until you find a policy at the right price point and with the right coverage for you.

Additional insurance resources for Tennesseans

Tennessee may not have a FAIR plan like other states, but the Tennessee Department of Commerce and Insurance does offer a wealth of helpful information. If you have any questions, start with the TDCI website or call the consumer helpline at 1-615-741-2176. In addition to the NAIC homeowners insurance guide and tips, they can help you verify an insurance provider, assist in finding a licensed contractor and send additional publications your way.

In addition, TDCI has a Glossary of Insurance terms so you can communicate with your provider more effectively. If something goes wrong, you can always file a complaint with the TDCI. You can also turn to their site to better understand disaster preparedness and how to review your homeowners policy.

If you have any questions about homeowners insurance in Tennessee, contact a Hippo specialist. Whether you need a quote or more background information, we’re here to help!

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