Tennessee Auto Insurance Law Changes: What You Need To Know

Tennessee's new auto insurance law, which came into effect in January 2023, mandates that drivers must have a minimum level of car insurance. This includes liability insurance, which covers bodily injury and property damage, with minimum coverage limits of $25,000 per person and $50,000 per accident for bodily injury, and $25,000 per accident for property damage. This law aims to ensure that all drivers can be held financially responsible for any potential damage or injuries caused in an accident.

While liability insurance is the only insurance required by the state, additional coverage is recommended for comprehensive protection. Tennessee's insurance verification system, introduced under the James Lee Atwood Jr. Law, ensures that all drivers comply with the state's financial responsibility requirements by continuously auditing insurance information throughout the year.

Penalties for driving without insurance

Tennessee requires all drivers to carry a minimum amount of car insurance. Driving without insurance can lead to serious consequences. 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 are caught driving without insurance, law enforcement officers may ask to see your insurance card and, if you cannot show proof of a policy, you may be charged with a Class C misdemeanour. This is punishable by a fine of $300, an increase from $100 before Governor Bill Haslam signed a new law with stricter penalties against uninsured drivers in July 2015. The officer also has the authority to have your vehicle towed.

To get your driver's license and registration back, you will need to provide proof of financial responsibility, pay a $65 restoration fee, and pay a $50 fee for an SR-22 form. An SR-22 form is a certificate that proves you have the minimum required auto insurance. Your insurer will need to file this form on your behalf, and it will need to stay on file for three years. During this time, your insurer may increase your premium as you are considered a risky driver.

Tennessee also uses the Insurance Industry Committee on Motor Vehicle Administration Model to verify which drivers are insured. If you are sent a notice by the Tennessee Department of Revenue, you should respond within 15 days and provide proof of insurance. If you do not, the state may charge you a $100 continued coverage failure fee after 30 days, in addition to a $25 coverage failure fee.

If you are caught driving without insurance and are involved in an accident, the penalties are more severe. This is considered a Class A misdemeanour and, if convicted, you may have to pay fines of up to $2,500 and face up to 11 months and 29 days in prison. You will also be responsible for covering any medical and repair bills that result from the accident.

Liability insurance requirements

Tennessee requires all drivers to carry a minimum amount of car insurance, and motorists must have some proof of financial responsibility to be considered legal drivers. The most common way to meet this requirement is to carry car insurance with at least the minimum coverage limits. Tennessee drivers may instead satisfy the law by filing either a cash deposit or a surety bond with the state.

The minimum liability coverage requirements in Tennessee are:

• $25,000 bodily injury liability per person and $50,000 per accident. This covers any single person injured in a car accident you cause. It will cover multiple people up to the "per accident" limit.
• $25,000 property damage liability per accident. This covers the total dollar amount that an insurance company will pay for damages to another's property caused by you.

While liability coverage is the only insurance required by the state of Tennessee, a bank or lien holder could require you to carry extra coverage if your vehicle is being financed (usually comprehensive and collision).

If you cause an accident, liability insurance covers those injured or who suffer damages but never covers your injuries or any damage to your property. It pays the other driver only. This coverage is usually split into two different types: bodily injury liability and property damage liability.

Bodily injury liability covers the medical costs associated with the car accident you caused, including funeral expenses in many cases. Property damage liability covers the cost of property damage you caused. Typically, this will be the victim's car, but it is not limited to that.

Tennessee allows this requirement to be met with what is known as a combined single limit. Instead of separating the coverage between bodily injury and property damage, you are covered for a combined amount of $90,000. This gives you more flexibility in what is covered. Not all insurers provide such a policy, so you will need to contact them individually.

Tennessee also requires uninsured motorist coverage to be included in every auto insurance quote. You may choose to reject this coverage as long as it is in writing, but most agents and government officials recommend keeping it. Uninsured motorist bodily injury coverage pays for your medical bills, regardless of who is at fault, and uninsured motorist property damage coverage pays for your car's repair expenses following an accident with an uninsured driver.

If you are caught driving without insurance in Tennessee, you may need to pay a fine or surrender your driver's license. You could also face other serious consequences, including having to pay out-of-pocket for any medical and repair bills that stem from an accident.

Proof of financial responsibility

Tennessee's Financial Responsibility Law requires all motorists to have a minimum limit of car insurance to be considered legal drivers. This means that drivers must carry liability coverage, which covers the cost of any injuries or property damage they cause in an accident. The minimum coverage requirements in Tennessee are:

• $25,000 for bodily injuries per person
• $50,000 for total bodily injuries per accident
• $15,000 for property damage per accident

These limits are known as a split limit, with separate amounts for per-person and per-accident coverage. The per-person limit refers to the maximum amount that the insurance company will pay out for any single person injured in an accident, while the per-accident limit is the total amount that will be covered for all injuries caused in a single accident.

Proof of insurance, also known as proof of financial responsibility, is crucial in Tennessee. Drivers must always carry this proof when operating a vehicle. If a driver is unable to provide evidence of financial responsibility when requested by a law enforcement officer, they may face penalties. These penalties can include:

• Fines: Failure to provide proof of insurance is considered a Class C misdemeanour, punishable by a fine of up to $300.
• Vehicle Towing: Law enforcement officers have the authority to tow the vehicle if the driver cannot provide proof of insurance.
• Driver's License Suspension: The driver's license and registration may be suspended until the driver can provide proof of financial responsibility and pay the associated fees.
• Increased Insurance Rates: The driver's insurance company may increase their premium, as they are now considered a risky driver.
• Retaking the Driver's License Exam: The state may require the driver to retake the driver's license exam to get their license and registration reinstated.

It is important to note that these penalties are in addition to any fines or legal consequences that may arise if the driver is found to be at fault for an accident.

Tennessee allows drivers to provide proof of financial responsibility in various ways. The most common method is by purchasing liability car insurance coverage from an insurance company authorized to do business in the state. This can be demonstrated through a physical copy of the insurance card or through digital means, such as the MyTN mobile app.

Alternatively, vehicle owners can also comply with the financial responsibility law by posting a cash deposit or bond in the required amount or by qualifying as a "self-insurer" under state law. In the case of a cash deposit or bond, a certificate valid for one year is issued by the commissioner of safety.

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. The system was launched in early 2017 and has been instrumental in reducing the number of uninsured motorists on Tennessee roads.

The verification system mandates that all auto insurance providers register with the Tennessee Department of Revenue and submit their policy details. This information is then cross-checked against every registered Vehicle Identification Number (VIN) in the state. If a driver's insurance information cannot be verified, 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 is a critical component of Tennessee's efforts to ensure that all motorists comply with the state's auto insurance laws. The system helps identify uninsured drivers and encourages them to obtain the necessary coverage. By maintaining a high level of compliance, Tennessee aims to protect its citizens from the financial risks associated with uninsured motorists.

In addition to the verification system, Tennessee has implemented strict penalties for drivers who fail to maintain the required minimum insurance coverage. These penalties include fines, driver's license suspension, and even jail time in some cases. The state actively monitors insurance coverage and takes action against those who do not meet the legal requirements.

Tennessee's insurance verification system plays a vital role in maintaining the safety and security of its roads. By holding motorists accountable for their financial responsibilities, the state ensures that individuals involved in accidents can receive the compensation they need. This system is a testament to Tennessee's commitment to protecting its citizens and creating a safe driving environment for all.

Collision and comprehensive coverage

Collision coverage pays to repair or replace your car if it is damaged in a collision with another object or if it rolls over. This type of insurance covers accidents involving another vehicle, but also those involving a single vehicle, for example, if you hit a lamppost or roll your car.

Comprehensive coverage, on the other hand, covers non-collision damage to your vehicle. This includes damage from vandalism, weather conditions, falling objects, natural disasters, floods, fires, and animal collisions. It also covers theft of your vehicle.

Together, these two types of insurance are often referred to as "full coverage". While they are not mandatory, lenders will usually require you to have both if you are financing your vehicle.

Frequently asked questions