Auto Insurance Basics

Auto Insurance Requirements in Tennessee

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The Tennessee Financial Responsibility Law requires that all motorists carry liability insurance with at least the minimum coverage limits stated: 25/50/15. Alternatively, either making a deposit or filing a bond with the Commissioner of the Department of Safety will also satisfy this law (covered below). 

When you drive in the Volunteer State, make sure you have your insurance ID card with you, if not a copy of your policy’s declaration page or insurance binder. You may get a fine, or worse, license suspension, when you fail to provide proof of insurance to a police officer who pulls you over.

Tennessee Required Car Insurance CoverageTN Required Min. Limits
Bodily Injury (BI) $25,000 per person / $50,000 per accident 
Property Damage (PD)  $15,000 per accident 

Tennessee Car Insurance Minimum Requirements

A valid Tennessee auto insurance policy must include liability insurance coverage. It requires that you be responsible for financial damages in the event you cause an accident, and makes your insurer will pay for the victim’s injuries and property damage resulting from the accident. You know that you have satisfied the minimum Tennessee financial responsibility when your policy provides the following coverage and limits:

Bodily Injury (BI): $25,000 coverage for the necessary medical treatment that each person injured in an accident requires when you are at-fault. This is limited to a total of $50,000 per accident when there are two or more injured persons. Necessary medical treatments may include everything from ambulance to surgeries, as well as post-recovery rehabilitative services. However, this is the bare minimum coverage limits required in Tennessee, and you should consider purchasing higher ones in order to fully protect your assets; available limits vary by insurer.

Property Damage (PD): a $15,000 coverage limit to pay for any property damage in an auto accident that you are mostly at-fault for. In most cases this means the other driver’s car repair costs, but it can also cover damage to a building or fences, as an example. You may want to consider buying higher limits in order to protect your total assets in case you are ever sued; available limits vary by insurer in Tennessee. 

Uninsured Motorist Coverage in Tennessee

The Insurance Code requires licensed Tennessee providers to include Uninsured Motorist coverage into your auto insurance quote. Nearly one out of every five claims submitted in Tennessee are due to an uninsured motorist, which makes it the 6th highest in the United States. You may choose to reject them in writing, but most agents and government officials recommend keeping them:

Uninsured Motorist Bodily Injury (UMBI): when you are hit by an uninsured driver, whose liability insurance - if they had any - would have covered your injuries, your own insurer's UMBI covers you instead. Available in limits 25/50 and higher, Tennessee UMBI coverage also covers you in the event the at-fault driver’s coverage fall short of your actual medical needs, provided that your UMBI limits are higher than his or her BI limits. For example, when you have UMBI in limits of 50/100, a driver with BI limits of 25/50 (TN state min.) is considered underinsured. However, note that your UMBI limits may never be higher than the BI limits on the same policy. 

Uninsured Motorist Property Damage (UMPD): Tennessee is one of the few states that makes UMPD available, and drivers here have a choice to include UMPD to claim their vehicle repair costs from their own insurer when they are hit by an uninsured motorist. Depending on the insurer, there may be a $200 deductible that you need to pay on your own for each accident before UMPD covers the remaining bill. Progressive, as an example, is a Tennessee insurer we've seen that includes the deductible; neither GEICO nor State Farm offers a deductible option. You can choose to purchase higher UMPD limit (the lowest coverage is $15,000), but it cannot be higher than your PD limit. 

Alternative Proof of Financial Responsibility

Motorists have a couple alternatives to an auto insurance policy in Tennessee. By fulfilling one of the following requirements below, the Commissioner of the Tennessee Department of Safety (DOS) will issue you a certificate of insurance. This certificate will be your proof of insurance that satisfies the Financial Responsibility Law when you register a vehicle, or are pulled over on the road. Specifically, the two alternatives and their subsequent requirements are:

Cash/Security Deposit: depositing $60,000 with the DOS will fulfill your responsibility as a TN motorist. The Commissioner will verify that there are no prior unsatisfied judgements against you, and issue you proof. This deposit, made in either cash or securities like government bonds or notes, acts as your insurance fund to satisfy future judgements arising from any auto accident you cause. 

Surety Bond: filing a copy of a bond that can cover a $60,000 payment with the DOS will fulfill your TN motorist duty. A surety bond is only valid as your proof of financial responsibility when it is issued by a surety company licensed in TN, and when it is at least valid for a year. When you cannot pay for the damage you have caused in an accident, the surety company will pay in your place (then ask you for the money back later).

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