Tennessee car insurance laws
Back in 2023, Tennessee’s car insurance landscape saw significant updates that drivers need to understand. With new regulations now mandating higher property damage liability limits, it’s important to stay informed about these changes to ensure you’re fully compliant. As experts in financial guidance, Bankrate is here to guide you through the latest TN car insurance laws, helping you navigate these updates and make informed decisions about your coverage. Whether you’re renewing your policy or shopping for a new one, understanding these changes can have a real impact on your insurance choices and financial well-being. We’ll help you learn how these laws affect you and why staying up-to-date is crucial for your peace of mind on the road.
Car insurance laws in Tennessee
Tennessee drivers must carry at least a liability insurance policy, which includes bodily injury and property damage coverage. The TN car insurance requirements are as follows:
- $25,000 bodily injury liability per person
- $50,000 bodily injury liability per accident
- $25,000 property damage liability per accident
In January 2023, Tennessee increased the state property damage liability requirement for auto insurance from $15,000 to $25,000. Existing minimum coverage policyholders saw their property damage liability limit increase at their renewal in 2023.
While most drivers will opt for a car insurance policy to satisfy the law, you can also post a $65,000 bond or cash deposit with the Tennessee Department of Revenue. This serves as proof that you can be held financially responsible for the damage and injuries you cause and allows you to drive without insurance.
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Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
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Powered by Coverage.com (NPN: 19966249)
Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
Liability insurance in Tennessee
Under the new Tennessee insurance law, liability insurance remains a fundamental requirement for all drivers. It covers costs for property damage or bodily injury you cause in an at-fault accident. While the state mandates minimum coverage limits, they may not fully cover all damage or injuries, potentially leaving you with additional expenses. To better protect yourself financially, consider opting for higher limits than the state’s minimum requirements.
For example, Tennessee’s law mandates a minimum of $25,000 for bodily injury per person. If you cause an accident that results in $30,000 worth of injuries, your insurance would only cover up to $25,000, leaving you responsible for the remaining $5,000. Given that Tennessee has a significant rate of uninsured drivers — nearly 21 percent, according to the Insurance Information Institute (Triple I) — it’s wise to consider uninsured and underinsured motorist coverage. Although these are not legally required, they offer protection against drivers who lack sufficient insurance, ensuring better financial security for you.
Tennessee’s insurance verification system
Tennessee’s insurance verification system, introduced under the James Lee Atwood Jr. Law, is a tool designed to ensure compliance with the state’s financial responsibility requirements. Launched in early 2017, this system performs continuous audits throughout the year, checking that all drivers maintain at least the minimum required coverage.
Under this system, all auto insurance providers must register with the Tennessee Department of Revenue and submit their policy details. The system then cross-checks these details against every registered Vehicle Identification Number (VIN) in the state. If a driver’s insurance information is flagged, they will receive a notice directing them to a website where they must provide proof of their coverage. Failure to respond to these notices can result in fines and the potential suspension of vehicle registration. This ongoing verification process helps reduce the number of uninsured drivers by ensuring that all motorists remain compliant with Tennessee’s auto insurance laws.
Is Tennessee a no-fault state?
No, Tennessee is not a no-fault state. Here’s a simple breakdown to help clarify:
In no-fault states, drivers have personal injury protection (PIP) insurance, which covers their medical expenses and related costs, no matter who caused the accident. However, drivers are still responsible for any damage they cause to other people’s property. In these states, there are sometimes limits on the ability to sue the at-fault driver.
Tennessee operates under a “tort” system instead. This means that if you’re involved in an accident and it’s determined that someone else is at fault, that person is responsible for covering the costs of injuries and property damage they caused. While drivers in Tennessee can use their own insurance to cover their expenses, their insurance company will often try to recover those costs from the at-fault driver. This process is known as subrogation.
Subrogation simply means that after your insurance company pays for your damage, it will step into your shoes and pursue the at-fault driver to get that money back. It’s a way for your insurance company to recoup its costs.
Additionally, Tennessee drivers who are not at fault in an accident have the option to sue the at-fault driver for any additional expenses or damage they have incurred.
Penalties for driving without insurance in Tennessee
It’s against the law to drive without car insurance in Tennessee (unless you have posted the required $65,000 bond or cash deposit to forgo an insurance policy). If you get caught driving without at least the minimum amount of coverage, you’ll have 30 days to provide proof of your insurance. If you fail to do so, you may face a variety of consequences, including:
- Driver’s license suspension until reinstatement requirements are met
- Proof of liability insurance (or SR-22 coverage if required)
- $65 reinstatement fee
- $75 failure to surrender license fee (if applicable)
If your license was suspended for driving without insurance, you may face two choices. Either you surrender your license (which garners an additional $75 fee), or you purchase a car insurance policy and have that company file an SR-22 form. This form is generated by an insurance company and sent directly to the state to prove that you have insurance coverage.
Additional auto insurance coverage options in Tennessee
While minimum coverage is all you need to drive legally, you may be required to purchase additional coverage if you have a loan or lease on your vehicle. If your vehicle is financed, you’ll also likely have to buy:
- Collision coverage: Collision covers damage to your own vehicle and can be used regardless of fault. There is generally a deductible, which is the amount you agree to pay out of pocket if you file a claim for vehicle damage.
- Comprehensive coverage: Also called “other-than-collision,” this coverage pays for damages from non-collision accidents, like theft, vandalism, storm damage or animal damage. Comprehensive also generally has a deductible.
Most car insurance companies also offer several optional coverage types that might be helpful:
- Medical payments coverage: This coverage is similar to PIP (which isn’t available in TN) in that it pays for your medical bills regardless of fault. While technically optional, this coverage is heavily advised by insurance professionals.
- Roadside assistance: This coverage could help pay for the cost of service calls, like towing services, tire changes and locksmiths.
- Rental car reimbursement: If your car is in the shop due to a covered accident, this coverage option could pay for the cost of a rental car, up to your coverage limit, until your vehicle is drivable again.
- Gap insurance: If you have a loan on your vehicle, this coverage is designed to pay the difference between the value of your vehicle if it is totaled or stolen and the remaining loan amount.
Frequently asked questions
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Finding the best car insurance company in Tennessee depends on your individual needs and priorities. Here’s how you can identify the right provider for you:
- Assess your coverage needs: Consider what types of coverage are essential for you. Are you looking for basic liability, comprehensive coverage or perhaps additional options like roadside assistance?
- Prioritize what matters most: Determine what you value in an insurance company. This might include low premiums, strong financial stability, a wide range of policy options or excellent customer service.
- Compare multiple providers: To find the best fit, compare different insurance companies based on your criteria. Look at their coverage options, rates, customer reviews and overall reputation.
By evaluating your specific needs and comparing various providers, you can find an insurance company that offers the best combination of coverage, service, and cost for your situation.
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Car insurance rates vary for each driver, so the cheapest company will be different for every driver in Tennessee. If you are looking for the cheapest car insurance company in Tennessee, your best option may be to compare personalized quotes from multiple providers. It may also be helpful to inquire about any discounts you may be eligible for, which could help maximize your savings.
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The average cost of coverage in Tennessee is less than the national average for full and minimum coverage policies. As of July 2024, minimum coverage averages $461 per year, while full coverage averages $1,890. To put this into perspective, the national average for auto insurance is $621 per year for minimum and $2,278 per year for full coverage.
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Yes. Car insurance follows the vehicle in Tennessee, not the driver. This is fairly common throughout the country. Essentially, as long as your car has coverage that meets the state’s insurance requirements, you can allow someone to drive it. That being said, you can still be held financially responsible for their driving, so use your best judgment. If someone frequently drives your vehicle, you may want to add them to your car insurance policy or ask that they purchase non-owner car insurance.
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