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If you’re setting out to explore the wonders of Tennessee, make sure that you have proper car insurance coverage in place. Like most states, Tennessee requires that drivers have auto insurance to drive legally. What’s more, Tennessee car insurance laws recently underwent a change. Bankrate’s insurance editorial team researched the new Tennessee insurance law so you can have peace of mind knowing how much coverage is required.
Car insurance laws in Tennessee
- $25,000 bodily injury liability per person
- $50,000 bodily injury liability per accident
- $25,000 property damage liability per accident
Until January 1, 2023, the property damage limit was only $15,000. Tennessee insurance laws now stipulate that the minimum required amount of property damage is $25,000. While this law was effective for new policies as of January 1, 2023, existing policies with only $15,000 in property damage coverage will likely be increased to the $25,000 level at their first 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
- $65 reinstatement fee
- $50 SR-22 fee
- $25 fee for failing to file proof of insurance
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.
- 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
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 Volunteer State is one of the less-expensive states to purchase auto insurance. Minimum coverage averages $371 per year while full coverage averages $1,429. To put this into perspective, the national average for auto insurance is $622 per year for minimum and $2,041 per year for full coverage.