Tennessee Car Insurance Laws | Bankrate (2024)

Tennessee Car Insurance Laws | Bankrate (1)

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Tennessee’s car insurance laws changed in 2023. Drivers in the state are now required to carry a higher property damage liability limit. Although a legitimate car insurance company in Tennessee will not sell you a policy that doesn’t meet state requirements, it’s still a good idea to be aware of these laws and how they could impact your coverage choices.

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 damages and injuries you cause and allows you to drive without insurance.

Liability insurance in Tennessee

Liability insurance is the backbone of all car insurance policies. It provides payment for property damage or bodily injury that you cause to others if you are in an at-fault accident. However, while minimum coverage limits are all you need to drive legally, they may be too low to pay for all the damages and injuries you cause, leaving you with out-of-pocket bills. For this reason, most insurance professionals advise that you buy higher limits than what is required.

For example, Tennessee car insurance laws require you to carry at least $25,000 bodily injury per person. If you hit another vehicle and the driver’s injuries total $30,000, your insurance will only pay up to the $25,000 limit, leaving you responsible for the additional $5,000.

Despite having minimum limits that are in line with the rest of the country, Tennessee has one of the highest estimated percentages of uninsured motorists in the country. Nearly 24 percent of Tennessee drivers are estimated to be uninsured, according to the Insurance Information Institute (Triple-I). Because of this, you may want to purchase uninsured motorist coverage and underinsured motorist coverage. Although not legally required, these options give you coverage for your injuries if you are hit by a motorist who has no insurance or whose limits are too low to fully pay for your damages. Essentially, you are buying bodily injury liability coverage for yourself, to protect your finances against the fallout of uninsured motorist accidents.

Is Tennessee a no-fault state?

No, Tennessee is not a no-fault state. In no-fault states, drivers are required to carry personal injury protection (PIP), which initially pays for their own medical bills and related costs regardless of fault (although fault may later be determined and the at-fault driver’s bodily injury coverage would pay). No-fault insurance is frequently misunderstood, and it only refers to the PIP portion of a policy. Drivers in no-fault states are always responsible for property damage that they cause. Additionally, some no-fault states restrict the ability to sue an at-fault driver in the aftermath of a claim.

Tennessee is a tort state, which means that the at-fault driver in an accident is responsible for the injuries and property damage that they cause. Although not-at-fault drivers may be able to use their own insurance policies to pay for their own injuries and damages, their insurance company would likely seek the money back from the at-fault driver in a process called subrogation. Generally, in tort states, not-at-fault drivers can sue the at-fault party for the expenses they 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 reimbursem*nt: 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

    • The best car insurance company in Tennessee is different for every driver. To find the best car insurance company for you, it may help to determine what your personal coverage needs are and what you value most in an insurance company. That could be low rates, financial stability, available policy options or something else entirely. It may benefit you to compare multiple providers that meet your needs to find the best options for your specific situation.

    • 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.

    • The average cost of coverage in Tennessee is less than the national average for full and minimum coverage policies. Minimum coverage averages $464 per year while full coverage averages $1,806. To put this into perspective, the national average for auto insurance is $740 per year for minimum and $2,542 per year for full coverage.

    • 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.

Tennessee Car Insurance Laws | Bankrate (2024)

FAQs

Tennessee Car Insurance Laws | Bankrate? ›

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.

What are the rules for car insurance in Tennessee? ›

Liability insurance is required to cover any damages or injuries you may cause someone as a result of a car wreck. In Tennessee, the mandatory minimum limits for car insurance are: $25,000 for each injury or death per accident. $50,000 for total injuries or deaths per accident.

What is the fine for not having car insurance in Tennessee? ›

The penalties for driving without insurance in Tennessee can include fines up to $300, fines and the suspension of your driver's license and registration. Penalties for repeat offenses may be even harsher. You can avoid these consequences by meeting Tennessee's minimum car insurance requirements.

What are policy limits in Tennessee? ›

State law requires that all registered vehicles have insurance with the following minimum policy limits: $25,000 for each injury or death per accident. $50,000 for total injuries or death per accident. $25,000 for property damage per accident.

Is TN a no-fault state? ›

Tennessee is not one of those states. Tennessee is considered a “fault state,” meaning that if you are injured in a car accident here and another driver is at fault, you may be able to recover damages from them and from their insurance company in a personal injury suit.

How does insurance work in Tennessee? ›

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.

What is considered full coverage in TN? ›

“Full” Coverage Can Include Liability, Collision, or Both

Most people consider “full” coverage to mean the mandatory liability insurance that is required by Tennessee law. Liability coverage pays for any bodily harm or injury caused by the policyholder when he is driving a covered vehicle.

Can you go to jail in Tennessee for no insurance? ›

Tennessee requires all drivers to carry a minimum amount of car insurance. You could face serious consequences for driving without it. According to Tennessee state law, you may have to pay fines, surrender your driver's license and registration or even serve jail time if you're caught driving without insurance.

Can you sue an uninsured driver in Tennessee? ›

Pursue a Claim or File a Lawsuit

Can you sue an uninsured driver in Tennessee? Yes.

Can you drive in TN without insurance? ›

Tennessee law requires all drivers to carry liability insurance coverage. If you're caught driving without it, especially following an accident, you could face fines, license suspension, and even imprisonment, particularly if the accident resulted in injuries or property damage.

What is Tennessee valued policy law? ›

Tennessee's valued policy law(T.C.A. 56-7-803) provides that an insurer is liable to the policyholder for the full policy limits if a total loss occurs.

What are the minimum requirements for insurance in Tennessee? ›

In Tennessee, all drivers must have some proof of financial responsibility in order to drive. The most common way to meet the requirement is carrying car insurance with at least the minimum coverage limits: $25,000 for bodily injury liability per person and $50,000 per accident, along with $25,000 for property damage.

What happens if the person at fault in an accident has no insurance in Tennessee? ›

Insurance may not have an impact on determining fault in a car accident, but it can get drivers into serious trouble after a crash. In Tennessee, anyone driving without car insurance who is involved in a wreck can be charged with a Class A misdemeanor, and they can be held personally liable for any injuries they cause.

Who determines fault in a car accident in Tennessee? ›

Comparative negligence is a legal principle that compares each party's liability for damages after an injury occurs. If you are in an accident in Tennessee, the fault each party bears for it is determined first. A judge or jury determines a percentage of fault per driver.

How much can someone sue for a car accident in Tennessee? ›

In an injury case, any costs you have incurred or paid out of pocket as a result of your injury are called economic damages. Since the law allows a victim to be restored to a pre-injury state, there is no cap on economic damages in a Tennessee car accident case.

Does car insurance follow the car or the driver in Tennessee? ›

Typically, car insurance in Tennessee follows the car, not the driver, depending on the coverages in your policy. This is known as ownership liability, which means if you allow a family member or friend to drive your car, they may be covered by your insurance policy.

What is the grace period for insurance in Tennessee? ›

Grace Period

The amount of time that a policy remains active after a premium payment goes unpaid. In Tennessee, this period lasts 30 days.

Is Tennessee a insurance matching state? ›

At the end of the day, if you have damage to the interior or exterior of your home, the insurance company must pay to match the surrounding areas in appearance. Be aware; while Tennessee has this law, not every state has matching laws, and some insurance policies even exclude the matching law.

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