A tree from the neighbor's yard lands on your roof. A driver runs off the road into your carport. A contractor's crew damages your siding. Sometimes the at-fault person's insurer offers money early, before anyone has agreed on the full amount or who is to blame. Tennessee has a statute for that situation: Tennessee Code § 56-7-131.
The short version: an advance payment helps you now, but it does not settle the question of fault, it does not add to the other side's policy limits, and it does not stop the statute of limitations on your claim.
| Topic | What § 56-7-131 says |
|---|---|
| Admission of liability | Payments to or on behalf of a claimant before trial are not an admission of liability in a personal injury or property damage action |
| If the claimant wins at trial | The defendant may introduce evidence of the payments, and the court reduces the award by the amount paid before judgment |
| Policy limits | Insurer advance payments are not in lieu of or in addition to the policy's limits of liability |
| Credit to the insurer | Sums paid in advance are treated as paid under the policy limits and deducted from the insurer's obligation |
| Statute of limitations | Advance payments do not interrupt the running of the statute of limitations on any claim |
Source: Tennessee Code § 56-7-131.
An advance is not an admission of fault
The statute says payments made before trial to or on behalf of a claimant are not to be construed as an admission of liability by the person who made them. That protects people and insurers who pay early, and it means you should not read an early check as a promise that the rest of the claim will be paid.
If the case goes to trial and the verdict favors the claimant, the defendant may introduce evidence of the payments, and the court reduces the award by the amount paid before the date of judgment. In other words, you do not collect the advance twice.
Advances count against the other side's limits
When an insurance company makes the advance, the statute says the payment is not in lieu of or in addition to the policy limits. The money is treated as paid under the policy limits and deducted from the insurer's obligation. If the at-fault party carries low limits, every advance shrinks what is left. Your own policy may also respond, depending on its terms. The difference between your claim and theirs: TDCI’s glossary explains the difference between a first-party claim and a third-party claim.
The clock keeps running
The statute is direct: making advance payments does not interrupt the running of the statute of limitations on any claim. If talks drag on, the deadline to file suit does not move just because some money has changed hands. Talk with an attorney about the deadline that applies to your claim.
Steps that help after property damage
- Document the damage and keep every estimate, invoice, and payment record.
- Learn the basic claim steps: How to File a Home Insurance Claim in Tennessee: A Step-by-Step Guide for 2026
- Know how Tennessee treats unfair claim handling: Tennessee law lists 15 unfair claims practices, including slow responses and unexplained claim denials.
- If you think a storm or damage claim was underpaid: Storm Claim Underpaid in Tennessee? Your Next Steps
- Penalties for bad-faith refusal to pay: Tennessee law can add up to 25% when an insurer refuses in bad faith to pay a loss within 60 days of a demand.
- What a public adjuster does: TDCI’s glossary says public insurance adjusters in Tennessee must be licensed by the state.
This article is informational only and is not legal advice. It summarizes Tennessee Code § 56-7-131 and does not promise coverage, a claim outcome, or eligibility. Your policy and the facts of your claim control.
Related reading from All Seasons
- TDCI’s glossary explains the difference between a first-party claim and a third-party claim.
- How to File a Home Insurance Claim in Tennessee: A Step-by-Step Guide for 2026
- Storm Claim Underpaid in Tennessee? Your Next Steps
- Tennessee law can add up to 25% when an insurer refuses in bad faith to pay a loss within 60 days of a demand.
- Tennessee law lists 15 unfair claims practices, including slow responses and unexplained claim denials.
- TDCI’s glossary says public insurance adjusters in Tennessee must be licensed by the state.
- TDCI glossary: what your insurance declarations page shows.
Free policy review
All Seasons Insurance Group offers a free personal policy review. Call 865-263-1400 or visit asigtn.com/get-a-quote/. This article is informational only and does not promise coverage or eligibility; your policy forms control. Seasons change. So should your coverage.
Is an early payment from the at-fault party's insurer an admission of fault in Tennessee?
No. Tenn. Code 56-7-131 says payments to or on behalf of a claimant before trial are not an admission of liability.
Do I get to keep an advance payment and the full verdict?
No. If the claimant wins, the defendant may show the payments and the court reduces the award by the amount paid before judgment.
Does an advance payment add to the other side's policy limits?
No. Insurer advance payments are not in lieu of or in addition to the policy limits and are deducted from the insurer's obligation.
Does an advance payment pause the statute of limitations?
No. The statute says advance payments do not interrupt the running of the statute of limitations on any claim.
Does this rule apply to property damage as well as injuries?
Yes. The statute refers to actions brought to recover for personal injuries or for damage to property.
What should I keep after the other side pays me early?
Keep the payment record with your estimates and invoices, since the court can reduce an award by amounts paid before judgment.
Should I get legal advice about my deadline?
Yes. Advance payments do not stop the statute of limitations, so ask an attorney which deadline applies to your claim.
How can All Seasons help after reading this?
Call 865-263-1400 or visit asigtn.com/get-a-quote/ for a free personal policy review. Informational only; no coverage promises. Seasons change. So should your coverage.
