FREQUENTLY ASKED QUESTIONS

Tennessee is enjoying a population boom with its low cost of living, growing jobs market, and thriving Nashville. It’s the 16th most populated state in the United States, despite being only the 36th biggest in land area.

With so many people moving to and living in Tennessee, what are the auto insurance requirements?

does tn require auto insurance?

Minimum Requirements

Auto insurance is required by the state of Tennessee. If you fail to purchase auto insurance, you could face a hefty fine and/or lose your right to drive your vehicle. These are serious consequences, in addition to the financial risk that you carry by driving without insurance if you’re responsible for an accident and having to pay for someone else’s injuries and damages.

The minimum legal requirements for auto insurance in Tennessee are $25,000 bodily injury per person, $50,000 bodily injury per accident, and $15,000 property damage per accident.

This is commonly written as $25,000/$50,000/$15,000, or 25/50/15. These are the maximum amounts that the insurance company will pay on your behalf if you’re responsible for an accident.

For example, let’s say you have an at-fault accident and there are two people in the other car. Both people have minor injuries, but their medical bills from the accident are both $20,000 each. Your policy would pay for all of this because the $20,000 medical bill that both people have are under the $25,000 bodily injury per person amount, and the total amount of $40,000 is also under the $50,000 maximum bodily injury per accident amount.

However, if the damages to their vehicle is also $20,000, then your policy will pay $15,000 from your property damages per accident amount, and you would personally be responsible for the other $5,000.

Uninsured and Underinsured Coverage

Tennessee does not legally require you to carry Uninsured or Underinsured Motorists coverage. However, just because it’s not legally required doesn’t mean you shouldn’t carry this.

Tennessee has one of the highest percentages of uninsured drivers in the country at 20%. This means that 1 in 5 drivers do not have insurance and would not have the ability to pay for your medical expenses and property damage (Uninsured Motorist Property Damage).

Only 4 states have higher percentages of uninsured drivers than Tennessee, so this is an important coverage to have.

Uninsured and Underinsured Motorist Coverage, often abbreviated to UM/UIM, is essentially buying an insurance policy for those 20% of drivers that don’t have insurance.

If you are in an accident and the other person is at-fault but doesn’t have insurance, then your own UM/UIM coverage will kick in and pay for your own injuries.

The difference between the two coverages is simple:

Uninsured Motorist (UM) pays for people without insurance. They don’t have any policy at all, so your UM coverage will cover the cost of your injuries up to the limit you buy.

Underinsured Motorist (UIM) is for situations where the cost of your injuries is higher than what the other person’s insurance limits are. In other words, they didn’t buy enough insurance to cover your medical bills.

The common situation is when people only buy the state minimum limits of 25/50/15. But if your medical bills are more than $25,000, then their policy isn’t enough, so your own UIM coverage would kick-in.

You can only select UM/UIM limits up to the amount that you have for your own BI/PD liability limits. Meaning, you can’t select $100,000/$300,000 in UM/UIM coverage if you only have the state minimum liability limits.

Is Comprehensive and Collision Required?

Tennessee does not legally require you to carry full coverage on your vehicle, which means having both Comprehensive and Collision coverage. These are the two things that cover your own vehicle.

However, if you have a loan or a lease on a vehicle, it’s common that the financial company will require you to carry full coverage on the car in order to satisfy the terms of the lease.

They’ll also want to be listed on your insurance policy as a Loss Payee, which means that they would get the money from the insurance company if you have a total loss.

If you have a smaller claim, such as glass breakage or hail damage, then the insurance company will send you the money to fix that claim, but the financial company will often be notified if they are listed on your policy.

If you don’t have a loan or a lease on your vehicle, then you won’t be required by anyone to carry full coverage. Whether you should or not will depend on different factors, such as the value of the vehicle and your own financial situation.

Bottom Line

Tennessee requires you to have auto insurance with liability limits of $25,000 bodily injury per person, $50,000 bodily injury per accident, and $15,000 property damage per accident.

With the high amount of uninsured drivers in Tennessee, it’s also important to carry Uninsured and Underinsured Motorist coverage, although this isn’t legally required.