Tennessee Car Insurance Laws | Bankrate

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Tennessee auto insurance laws were updated in 2023, so it may be a good idea for drivers in the Volunteer State to brush up on what is required of them to be behind the wheel legally. Simply put, TN car insurance laws saw an increase in property damage liability, from $15,000 to $25,000, which means your insurance coverage needed to increase to meet minimum requirements. Bankrate’s insurance editorial team studied the new state laws and created this guide to help you learn how the laws may impact you when you drive — as well as when you look for the best Tennessee car insurance coverage for your needs.

Car insurance laws in Tennessee

Tennessee drivers must carry at least a liability insurance policy, which includes bodily injury and property damage coverage. The TN car insurance requirements are as follows:

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

In January 2023, Tennessee increased the state property damage liability requirement for auto insurance from $15,000 to $25,000. Existing minimum coverage policyholders saw their property damage liability limit increase at their renewal in 2023.

While most drivers will opt for a car insurance policy to satisfy the law, you can also post a $65,000 bond or cash deposit with the Tennessee Department of Revenue. This serves as proof that you can be held financially responsible for damage and injuries should you cause an accident and allows you to drive without insurance.

Liability insurance in Tennessee

Under the new Tennessee insurance law, liability insurance remains a fundamental requirement for all drivers. It covers costs for property damage or bodily injury you cause in an at-fault accident. While the state mandates minimum coverage limits, they may not fully cover all damage or injuries, potentially leaving you with additional expenses. To better protect yourself financially, consider opting for higher limits than the state’s minimum requirements.

For example, Tennessee’s law mandates a minimum of $25,000 for bodily injury per person. If you cause an accident that results in $30,000 worth of injuries, your insurance would only cover up to $25,000, leaving you responsible for the remaining $5,000. Given that Tennessee has a significant rate of uninsured drivers — nearly 21 percent, according to the Insurance Information Institute — it’s wise to consider uninsured and underinsured motorist coverage. Although these are not legally required, they offer protection against drivers who lack sufficient insurance, ensuring better financial security for you.

Is Tennessee a no-fault state?

No, Tennessee is not a no-fault state. Here’s a simple breakdown to help clarify.

In no-fault states, drivers have personal injury protection (PIP) insurance, which covers their medical expenses and related costs, no matter who caused the accident. However, drivers are still responsible for any damage they cause to other people’s property, which could include a vehicle as well as stationary objects like fences and light posts. In states with no-fault laws, there are sometimes limits on the ability to sue the at-fault driver.

Tennessee operates under a “tort” system instead. This means that if you’re involved in an accident and it’s determined that someone else is at fault, that person is responsible for covering the costs of injuries and property damage they caused. While drivers in Tennessee can use their own insurance to cover their expenses, their insurance company will often try to recover those costs from the at-fault driver. This process is known as subrogation.

Subrogation simply means that after your insurance company pays for your damage, it will pursue the at-fault driver to get that money back. It’s a way for your insurance company to recoup its costs.

Additionally, Tennessee drivers who are not at fault in an accident have the option to sue the at-fault driver for any additional expenses or damage they have incurred.

Penalties for driving without insurance in Tennessee

It’s against the law to drive without car insurance in Tennessee (unless you have posted the required $65,000 bond or cash deposit to forgo an insurance policy). If you get caught driving without at least the minimum amount of coverage, you’ll have 30 days to provide proof of your insurance. If you fail to do so, you may face a variety of consequences, including:

• Driver’s license suspension until reinstatement requirements are met
• Proof of liability insurance (or SR-22 coverage if required)
• $65 reinstatement fee
• $75 failure to surrender license fee (if applicable)

If your license was suspended for driving without insurance, you may face two choices. Either you surrender your license, or you purchase a car insurance policy and have that company file an SR-22 form. This form is generated by an insurance company and sent directly to the state to prove that you have insurance coverage.

Additional auto insurance coverage options in Tennessee

While minimum coverage is all you need to drive legally, you may be required to purchase additional coverage if you have a loan or lease on your vehicle. If your vehicle is financed, you’ll also likely have to buy:

• Collision coverage: Collision covers damage to your own vehicle and can be used regardless of fault. There is generally a deductible, which is the amount you agree to pay out of pocket if you file a claim for vehicle damage.
• Comprehensive coverage: Also called “other-than-collision,” this coverage pays for damages from non-collision accidents, like theft, vandalism, storm damage or animal damage. Comprehensive also generally has a deductible.

Most car insurance companies also offer several optional coverage types that might be helpful:

• Medical payments coverage: This coverage is similar to PIP (which isn’t available in TN) in that it pays for your medical bills regardless of fault. While technically optional, this coverage is heavily advised by insurance professionals.
• Roadside assistance: This coverage could help pay for the cost of service calls, like towing services, tire changes and locksmiths.
• Rental car reimbursement: If your car is in the shop due to a covered accident, this coverage option could pay for the cost of a rental car, up to your coverage limit, until your vehicle is drivable again.
• Gap insurance: If you have a loan on your vehicle, this coverage is designed to pay the difference between the value of your vehicle if it is totaled or stolen and the remaining loan amount.

Frequently asked questions

• What is the best car insurance company in Tennessee?
  

  Finding the best car insurance company in Tennessee depends on your individual needs and priorities. Here’s how you can identify the right provider for you:

  • Assess your coverage needs: Consider what types of coverage are essential for you. Are you looking for basic liability, comprehensive coverage or perhaps additional options like roadside assistance?
  • Prioritize what matters most: Determine what you value in an insurance company. This might include low premiums, strong financial stability, a wide range of policy options or excellent customer service.
  • Compare multiple providers: To find the best fit, compare different insurance companies based on your criteria. Look at their coverage options, rates, customer reviews and overall reputation.

  By evaluating your specific needs and comparing various providers, you can find an insurance company that offers the best combination of coverage, service, and cost for your situation.

• What is the cheapest car insurance company in Tennessee?
  

  There’s no single company that always offers the cheapest car insurance in Tennessee to every driver, all the time. Insurers use a broad range of factors, from your age and location to your car’s age, make and model, when they are determining rates. One way to keep your rates low is to maintain a clean driving record. Carriers tend to reserve their best rates for drivers with no marks on their license, all other factors being equal. When looking for the cheapest Tennessee car insurance, it can be helpful to ask for quotes from more than one company, so you can compare their options and find the lowest possible price for your coverage. Also, ask about discounts — almost every insurer offers at least a few, and they can provide considerable savings.

• How much does car insurance cost in Tennessee?
  

  The average cost of coverage in Tennessee is less than the national average for full and minimum coverage policies. As of July 2025, minimum coverage averages $504 per year, while full coverage averages $1,991. To put this into perspective, the national average for auto insurance is $807 per year for minimum and $2,677 per year for full coverage.

• Can someone drive my car if they’re not on my insurance in Tennessee?
  

  Yes. Car insurance follows the vehicle in Tennessee, not the driver. This is fairly common throughout the country. Essentially, as long as your car has coverage that meets the state’s insurance requirements, you can allow someone to drive it. That being said, you can still be held financially responsible for their driving, so use your best judgment. If someone frequently drives your vehicle, you may want to add them to your car insurance policy or ask that they purchase non-owner car insurance.