Tennessee is an at-fault auto state. Its rules sit on top of the standard Personal Auto Policy covered in the national guide. The sources are the financial responsibility law (Tenn. Code Ann. 55-12), the auto insurance statutes (56-7-1101 to 56-7-1305) and the claims rule (Rule 0780-01-05-.09).

Financial responsibility (55-12-102)

• Minimum limits: 25/50/25:

  • $25,000 bodily injury per person
  • $50,000 bodily injury per accident
  • $25,000 property damage

  Or a $65,000 single limit. The property damage minimum rose from $15,000 to $25,000 for proof required after December 31, 2022.

• Other ways to prove financial responsibility:

  • a $65,000 cash deposit with the commissioner
  • a $65,000 bond filed with the commissioner

• In this law, "commissioner" means the commissioner of safety.

• After a suspension or revocation, proof must be kept for a period equal to the suspension or revocation (55-12-114).

Ride-sharing (TNC) drivers (55-12-141; 56-7-1119)

• If the driver's coverage lapses, the TNC's insurer pays from the first dollar and has a duty to defend.
• Personal auto policies may exclude all coverage while the driver is logged on or giving a ride.
• TNC coverage may come from an authorized insurer or an eligible surplus lines insurer.

Which policy pays first (56-7-1101)

• The owner's policy is primary when the car is driven with permission. The driver's own policy is excess.
• When the car is with a business that stores, services or repairs vehicles, that business's garage policy pays first.
• For a leased car where the lessee provides coverage, the lessee's policy pays first.

Uninsured motorist coverage (56-7-1201 to 56-7-1206)

• UM is included in every auto liability policy on a Tennessee vehicle, at limits equal to the BI limits, unless a named insured rejects it in writing.
  • The named insured may pick lower limits in writing, but not below the financial responsibility minimum.
  • A rejection binds every insured and doesn't have to be repeated at renewal.
• Underinsured vehicles are part of UM. A vehicle counts as uninsured when its liability limits are less than your UM limits (56-7-1202).
• Excluded: vehicles owned by or furnished for the regular use of the insured or a resident relative.
• UM property damage must be offered for losses over $200 (56-7-1201(c)).
• Unknown driver with no physical contact: the driver's existence must be shown by clear and convincing evidence other than the testimony of the insured vehicle's occupants. The insured files a John Doe warrant.
• The UM insurer can't require arbitration (56-7-1206).
• An insurer can't raise the rate or cancel solely because it paid a UM claim.
• Umbrella and excess policies don't have to include UM.

Cancellation and nonrenewal (56-7-1301 to 56-7-1305)

Scope. These rules don't cover:

• policies insuring more than 4 autos
• assigned risk policies
• garage policies

Cancellation

• After 60 days, the insurer may cancel only for listed reasons (56-7-1302), including:
  • nonpayment
  • misrepresentation, including failure to disclose accidents and violations from the past 36 months
  • a license suspension or revocation within 36 months
  • a third moving violation within 36 months
• An insurer can't cancel solely for a collision that wasn't adjudicated your fault.
• Notice (56-7-1303):
  • at least 20 days in general
  • 10 days for nonpayment, or for a new policy in force under 60 days
• For a policy in force over 60 days, you may ask for the reasons up to 15 days after the cancellation date.
• When a driver is added, the insurer has 60 days to accept or reject.

Nonrenewal

• At least 30 days' notice (56-7-1304).
• Notices other than for nonpayment must mention possible eligibility for the assigned risk plan (56-7-1305).

Discounts

• Drivers over 55 who finish an approved accident-prevention course get an actuarially justified discount for 3 years (56-7-1107).
  • The course is at least 8 hours, classroom or approved online.
  • Not available if the driver's license was suspended in the past 3 years.

Auto claims (Rule 0780-01-05-.09)

• Total loss: the insurer offers a comparable replacement car, paying taxes and fees, or a cash settlement based on the cost of a comparable car.
• The insurer pays the difference, or names a local shop that will repair the car for its estimate.
• It pays reasonable towing charges, whichever company the insured used.
• It can't make the insured supply parts.
• On request, the insurer includes the deductible in its subrogation demand and shares recoveries proportionately.

Common exam traps

• Limits are 25/50/25, or a $65,000 single limit or deposit.
• UM is included unless rejected in writing. UIM is built into UM.
• UM property damage applies over $200.
• Cancellation notice: 20 days, or 10 for nonpayment or a new policy.
• Nonrenewal: 30 days.
• TNC coverage: 50/100/25 while logged on, $1 million during a ride.