Auto Insurance in Tennessee


Tennessee, home of Memphis’ Beale Street, is distinguished by music lovers as the birthplace of the blues. Tennessee is also distinguished in the auto insurance industry as being one of the very few states that doesn’t require drivers to have auto insurance when they register their vehicle.

Financial responsibility law

While Tennessee’s Financial Responsibility Law doesn’t require minimum liability auto insurance, the law compels you to prove financial responsibility. If you have an accident while driving, you’re still liable and the cost could be enormous, so instead of singing the blues, think carefully about the idea of not purchasing auto insurance. If you choose not to carry insurance, you must prove financial responsibility.

Proving financial responsibility can be accomplished in one of two ways:

  1. Purchase liability insurance from a provider that is allowed to sell auto insurance in Tennessee, or
  2. Post a bond or cash deposit with the Tennessee Department of Safety.

Quite simply, in Tennessee you must be able to prove that you have the resources necessary to pay for damages or injuries caused in an accident. If you own a business that owns more than 25 vehicles, you can also self-insure.

The easiest method of proving financial responsibility for most people is to purchase auto insurance in Tennessee.

Minimum standards for purchasing Tennessee auto insurance

If you decide to get auto insurance coverage you must obtain coverage that meets the following minimum standards:

  • $25,000 for one injury or death
  • $50,000 for all injuries or death
  • $15,000 for property damage in a single accident

Who is covered

In general, all eligible drivers in the primary driver’s household are covered. However, it is legal in Tennessee to exclude a member of your household from your policy. It is also legal for your auto insurance company to write a policy that excludes household members that may be considered high-risk due to driving history, etc.

These exclusions are listed in the exclusions section of the policy, which also includes a list of all possible circumstances that would free the insurance company from the responsibility of paying a claim.

It is important to note that because a household exclusion means that the excluded person will not be covered under any circumstances, including emergencies, it is imperative that understand and carefully examine your auto insurance policy carefully before signing it.

Uninsured and underinsured drivers

Uninsured and underinsured drivers are still liable when they cause an accident. When these drivers have an accident they will be liable for all damages and they will be fined $100 and have their licenses suspended.

Uninsured Motorist Insurance (UMI) is coverage drivers can purchase to protect them against losses sustained at the hands of drivers who have no liability insurance and no means to pay for the damages that they caused.

Rental car

If you drive a rental car, you are still required to meet minimum financial responsibility requirements. If you get stopped by a law enforcement officer you must provide proof of financial responsibility. If you have dropped your comprehensive or collision insurance in order to save money, you will not be covered if the rental is stolen or damaged in an accident, therefore it only makes sense to purchase the coverage offered by the rental company.

Who is liable

The state of Tennessee follows a Tort System. This means that if you are involved in an accident, someone must be found to be the cause or fault of the accident. The person deemed at fault is responsible for all damages. Damages are usually handled through the at-fault person’s insurance company. Because Tennessee is a Tort state, most insurance companies recommend that drivers consider carrying higher coverages than the state minimums.

Average Annual Cost of Insurance

Tennessee has one of the lowest average auto insurance premiums in the nation. The 2011 average annual auto insurance premium for Tennessee is $1,146.00, while the national average is $1,561.00.



Insurance Information Institute
Tennessee Department of Commerce and Insurance
Tennessee Department of Safety & Homeland Security


Tennessee Department of Commerce and Insurance
Tel 615-741-2241