The state of Tennessee requires all drivers to carry at least a minimum level of automobile insurance coverage to protect against the costs of accidents. If you are considered a high-risk driver by insurance companies – due to a history of accidents, DUIs or a lack of driving experience - it might be a challenge to find coverage getting a regular auto insurance quote online.
If you find that insurers are declining your application, you can turn to the Tennessee Automobile Insurance Plan (TNAIP). The Plan takes all eligible drivers to provide coverage to the driving public. However, that coverage may cost you more than it otherwise would. So work to improve your driving record, so you can turn to better auto insurance rates in Tennessee on your own as soon as you can.
The TNAIP has been around since 1949. Its purpose is to provide coverage to drivers with eligible risks who are unable to obtain coverage through the voluntary market – when companies voluntarily take on your insurance application. The program itself doesn’t actually provide coverage or pay claims to you. It is an organization that assigns high-risk drivers to licensed auto insurers in the state, such as GEICO. Any auto insurer who wants to do business in the Volunteer State must agree to participate in the program and insure some high-risk drivers along with the safer ones (known as preferred risks).
The number of high-risk drivers that each auto insurer must cover depends on their market share. So if Allstate has 5% of the overall auto insurance market in the state, then they must insure 5% of the drivers who seek insurance through TNAIP. It’s a way for all the insurance companies to share potential losses from these drivers. Note that because of this distribution mechanism, you can’t necessarily pick the insurance company you want. TNAIP will assign you to whichever company is up next.
Any driver who holds a valid driver’s license and a car that is registered (or about to be registered) in Tennessee essentially qualifies for assignment through the TNAIP. Nevertheless you also must meet a few criteria:
- You must attest in your application that you have tried unsuccessfully to find coverage in the voluntary market within the prior 60 days.
- You must fill out the application completely and in good faith. If the insurer has difficulty verifying your information as a driver, that can be grounds to refuse you a policy.
- If you have failed to pay an auto insurance premium in the last 12 months, TNAIP will require you to pay it before the application proceeds.
- If you want coverage for physical damage, you must present your vehicle for inspection before that can happen. If you don’t, that portion of your coverage can be refused.
If there is a problem with your application initially, you can reapply to TNAIP as soon as the problem is resolved, e.g. pay your bill, present your car for inspection, provide the information requested. The only exception to this is if the insurer decides that your application is NOT in good faith, i.e. you have left out information that has a direct bearing on how they would assess and price your policy. If that happens, you must wait 12 months to reapply.
Car insurance coverage options through the TNAIP are largely the same as if you were applying with any insurance company on your own – they’ll just cost more in Tennessee. Tennessee laws require that all auto insurance providers must make Bodily Injury and Property Damage coverages, as well as optional coverage to protect against uninsured drivers on the road.
Once you are assigned an insurer and receive a policy, that coverage lasts for 3 years. That’s a good time to improve your driving record by driving safely and avoiding accidents. Keep current with your premium payments, and your insurer should be happy to keep your policy in force. Note that if you find better auto insurance coverage during this time, you can switch. Be sure to notify your assigned insurer of the change, and they will refund any remaining premium, minus a 10% surcharge for terminating the policy early. At the end of the 3 years, if you remain a high-risk driver, you can reapply to the TNAIP and be treated as a new applicant. That means that your insurer may change, but you will still have access to coverage.
The table below shows the different kinds of coverages available, as well as the minimum and maximum limits of coverage that you can buy.
|Mandatory Coverage||Tennessee Required Min. Limits||TNAIP Max. Limits|
|Bodily Injury (BI)||$25,000 per person / $50,000 per accident||$100,000 per person / $300,000 per accident|
|Property Damage (PD)||$15,000 per accident||$50,000 per accident|
While there are mandatory minimum coverages that you must have, the auto insurers have a lot of leeway when it comes to providing higher coverage limits and optional coverages. Think through your financial situation in order to select the different coverages and the right limits for your situation. And of course, the more coverage you buy, the higher your premium will be. Note that if you purchase Collision or Comprehensive coverage, TNAIP policyholders have a choice of deductible amount among $100, $250, $500 and $1,000.
|Optional Coverage||TNAIP Min. Limits / Deductible||TNAIP Max. Limits|
|Uninsured Motorist - Bodly Injury||$25,000 per person / $50,000 per accident||As high as your Bodily Injury coverage, but not higher|
|Uninsured Motorist - Property Damage||$15,000 per accident||As high as your Property Damage coverage, but not higher|
|Collision||$100 deductible||Actual cash value of your car|
|Comprehensive||$100 deductible||Actual cash value of your car|
Auto insurance premiums are set based on many factors, from where you live to the make and model of your car. Often the most important factor considered is your driving record. If you’ve landed in the high risk pool, you want to understand what factors are working against you (and driving up the cost of your coverage) and work to address them ASAP.
High-risk drivers in Tennessee are offered 3 ways to pay their auto insurance premiums:
- 100% of the annual premium up front
- 30% of the premium as a deposit with your application, and the remainder of the annual premium within 30 days
- 25% of the annual premium, and then 5 equal monthly installments. So that the entire premium is paid in 6 months.
Note that if your payment record for auto insurance has been less than perfect in the past, you may be required to pay the whole insurance premium up front. If cash flow is an issue for you, installments may be the better option for you. Know that the installment plan charges a small $4 fee for processing.
You can approach any licensed car insurance agent for further information about the TNAIP. Ask your insurance agent about the program. When you do not qualify for auto insurance coverage through regular means, your agent should let you know about the TNAIP option and help you apply through the electronic application submission interface (EASi). Once you are assigned a company, both you and the company will be notified by the TNAIP about your coverage.
For more information about the TNAIP, call the Tennessee Department of Commerce and Insurance at 1-800-342-4029.