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Home / Insurance / Delayed and denied problems with Tennessee insurance claims? Interested in Tennessee Award Prejudgment? | Real Estate Insurance Coverage Blog

Delayed and denied problems with Tennessee insurance claims? Interested in Tennessee Award Prejudgment? | Real Estate Insurance Coverage Blog



Insurance companies often delay and refuse payment even when an applicant is entitled to this money. As such, courts may grant interest for the loss of use of money suffered by the plaintiff. Interest that accrues before a judgment is introduced is called interest rate.

The Tennessee Statutes allow for advance interest. The charter states:

Advance interest, ie interest as part of, or in the form of, damages, under permits under state laws and common laws from 1 April 1979, may be awarded by courts or juries in accordance with the principles of equity at any rate not exceeding a maximum effective interest rate of 10% (10%) per annum; provided that with respect to contracts covered by § 47-1

4-103, the maximum effective interest rates on the pre-assessment rate thus allocated shall be the same as determined by that section for the relevant category of transaction. In addition, contracts may expressly provide for the introduction of the same or a different interest rate after a violation or default within the limits laid down in § 47-14-103. 1

In accordance with the charter, the maximum allowable interest rate is 10% per annum. The interest rates of the current judgment can be found here. 2

It is well established in the Tennessee Act that the decision to grant statutory interest is within the discretion of the court – Tennessee Supreme Court has on several occasions had 3 The Supreme Court of Tennessee has further stated that the granting of an advance interest is not regarded as a sanction imposed on the defendant but is permitted in accordance with the principles of capital. 4

Finally, with regard to interpreting the language of the TCA §47-14-123, the Court of Otis considered that the simple meaning of the Charter limits the allocation of fairly allotted advance interest to 10% per year per year, with the statement that “in order to interpret the charter to mean compound interest is authorized, it constitutes a forced construction that is impossible to expand the legislator's intention. 5 The case was arrested with an instruction to calculate interest with a simple interest rate with a ceiling of 10% per annum.
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1 TCA §47-14-123.
2 Tennessee Judgments Interest Rates https://www.tncourts.gov/node/1232344 Chapter19659007 Premiere Statistics: A. Crane Serv., Inc. 880 SW2d 938 (Tenn. 1994); Otis vs. Cambridge Mut. Fire Ins. Co. 850 S.W.2d 439 (Tenn. 1992).
4 Otis at 447; ( with reference to In re Estate of Davis 719 S.W.2d 526 (Tenn.App.1986)).
5 Id.


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