The Tennessee Department of Commerce and Insurance (TDCI) is responsible for verifying insurance providers, licensing individuals and corporations, and providing resources for consumers to compare insurance options.
It oversees the licensing and regulation of more than 1,600 insurance companies and 90,000 agents within Tennessee. The TDCI also conducts financial oversight to verify that companies comply with state and federal regulations.
The department has a track record of successfully mediating disputes and securing restitution for consumers. For instance, in 2023, the TDCI returned over $17.45 million to Tennesseans through mediation and restitution efforts, demonstrating the effectiveness of their dispute resolution process.
What are the Auto Insurance Requirements in Tennessee?
As mandated in Tennessee Code Section 56-7-1118, the electronic insurance verification program in Tennessee, established under James Lee Atwood, Jr. Law, is designed to verify that all actively registered vehicles carry the minimum liability insurance coverage required by state law.
The minimum auto insurance coverage required includes the following:
- $25,000 for bodily injury per person
- $50,000 for bodily injury per accident
- $25,000 for property damage per accident
While not mandated by the state, uninsured motorist coverage is offered by insurers and can be rejected in writing by policyholders. This coverage is crucial due to Tennessee's high rate of uninsured motorists, with approximately 20-25% of drivers estimated to be uninsured, making it the state with the fifth-highest number of uninsured drivers in the country.
Tennessee employs an electronic insurance verification system to automatically confirm the insurance status of registered vehicles. Furthermore, drivers must carry proof of insurance at all times and present it during traffic stops, at accident scenes, or when registering a vehicle.
The TDCI offers "A Consumer's Guide to Auto Insurance" on its website to help drivers understand their insurance options and requirements.
Other Types of Coverage Available in Tennessee
Tennessee drivers have several optional insurance coverages available to enhance their protection on the road. These coverages can provide financial security in various situations and are highly recommended, especially given the high rate of uninsured motorists in the state.
Collision Coverage
Collision coverage pays for the repair or replacement of the policyholder's vehicle if it is damaged in a collision with another vehicle or object, regardless of who is at fault. For instance, if a driver has a $500 deductible and the repair costs $3,000, the insurance will cover $2,500.
Comprehensive Coverage
Comprehensive coverage, also known as "other-than-collision" coverage, protects against damages to the policyholder's vehicle from non-collision incidents. Like collision coverage, comprehensive coverage usually comes with a deductible.
For example, if a tree falls on a car during a storm and causes $4,000 in damage, and the policy has a $1,000 deductible, the insurance will cover $3,000.
Medical Payments Coverage
Medical payment coverage, often referred to as MedPay, is an optional auto insurance coverage that pays for reasonable and necessary medical expenses for the policyholder and their passengers, regardless of who is at fault in an accident.
While not required by law in most states, MedPay is highly recommended as it provides additional financial protection for medical costs resulting from an accident.
For example, if medical expenses total $10,000 and a policyholder has MedPay coverage with a $5,000 limit, it would cover $5,000 of those costs. The policyholder would be responsible for the remaining balance unless covered by health insurance or other means.
Roadside Assistance
Roadside assistance coverage provides help in the event of a breakdown or other roadside emergencies. Services such as towing, tire changes, jump-starts, fuel delivery, and lockout assistance can be covered.
If a driver needs a tow to a nearby repair shop, this coverage can cover the towing cost up to the policy's limit.
Rental Car Reimbursement
Rental car reimbursement coverage pays for the cost of a rental car while the policyholder's vehicle is being repaired due to a covered accident. For example, if a policy provides $30 per day for up to 30 days, the insurance will cover up to $900 for a rental car.
Penalties for Driving Without Insurance in Tennessee
Driving without insurance in Tennessee can lead to severe consequences, as the state enforces strict penalties to guarantee compliance with the law.
Drivers convicted of failure to show proof of financial responsibility may face suspension of their driving privileges if they do not provide proof of liability insurance in effect on the date of the violation.
If a driver is caught without insurance, they may face a Class C misdemeanor charge, which carries a fine of up to $300. Additionally, law enforcement officers have the authority to tow the vehicle on the spot.
Furthermore, the driver's license and vehicle registration will be suspended until proof of insurance is provided, along with the payment of a $65 restoration fee and a $50 fee for filing an SR-22 form.
In cases where a driver is involved in an accident without insurance, the penalties are even more severe. The driver could face a Class A misdemeanor, which is punishable by fines up to $2,500 and imprisonment for up to 11 months and 29 days.
Repeated offenses can lead to additional penalties, including higher fines and extended suspension periods. Meanwhile, providing false insurance information to avoid penalties can result in charges of insurance fraud, which carries its set of severe penalties, including jail time and substantial fines.
How To Choose the Right Auto Insurance in Tennessee?
When choosing the right auto insurance in Tennessee, evaluating various coverage options is crucial. Opting for a full-coverage policy, which includes both collision and comprehensive coverages, is often recommended, especially for those with newer vehicles or auto loans.
Insurance rates can vary significantly between companies, even for the same levels of coverage. By obtaining at least three quotes, drivers can better gauge the market and find the most competitive rates.
Additionally, considering discounts and add-ons can further reduce costs. Valuable add-ons such as accident forgiveness, new car replacement, and vanishing deductibles can provide extra peace of mind.
Choosing a company with a strong reputation for customer service and claims handling can make a significant difference.
Furthermore, working with an independent insurance agent can be convenient. Agents can help compare policies from multiple insurers, provide personalized advice, and assist with any questions.
By considering these factors and taking a strategic approach, individuals can find the right auto insurance policy in Tennessee that offers the necessary coverage at an affordable price.
What Factors Affect Auto Insurance Rates in Tennessee?
Auto insurance rates in Tennessee are influenced by various factors that insurers use to assess risk and determine premiums. In 2024, the average annual premium for full coverage auto insurance in Tennessee was $1,890, while minimum coverage averaged $461.
These rates are below the national average, ranking Tennessee as the 34th most expensive state for car insurance.
However, individual premiums can vary significantly based on several key factors that insurance companies consider when calculating rates.
Driving Record
Driving history is one of the most significant factors affecting auto insurance premiums in Tennessee. Insurance companies typically review records for the past 3 to 5 years, considering traffic violations, accidents, and claims. A clean driving record often leads to lower premiums, as it suggests a lower-risk driver.
For instance, a single speeding ticket in Tennessee can increase annual premiums by an average of 19%, while an at-fault accident could result in a 43% increase. More serious offenses, such as a DUI, can cause premiums to more than double, with an average increase of 112%.
Credit-Based Insurance Score
In Tennessee, insurers are allowed to use credit-based insurance scores as a factor in determining premiums. Drivers with poor credit in Tennessee pay an average of $4,045 annually for full coverage insurance, which is 114% higher than the state average. Drivers with excellent credit pay an average of $1,554, which is 18% below the state average.
Demographics
Personal characteristics, such as age and gender, also determine auto insurance rates in Tennessee. Young drivers, particularly those under 25, typically face higher premiums due to their lack of driving experience and higher accident rates.
For example, a 16-year-old driver in Tennessee might pay an average of $7,703 annually for full coverage insurance, while a 30-year-old pays an average of $2,132. Male drivers often pay more than female drivers, especially in younger age groups.
Vehicle Type
The make, model, and year of the vehicle significantly influence insurance premiums in Tennessee. Sports cars and high-performance vehicles typically have higher premiums due to their increased risk of accidents and higher repair costs.
For instance, insuring a BMW 330i in Tennessee costs an average of $2,336 annually, compared to $1,655 for a Honda CR-V. Large SUVs and trucks may also incur higher liability coverage costs due to their potential to cause more serious damage in accidents.
Location and Vehicle Use
Urban areas typically have higher rates of accidents and auto thefts than rural areas, leading to increased premiums for city dwellers. For example, drivers in Nashville or Memphis might pay more than those in smaller towns or rural parts of the state.
Drivers with longer commutes or higher annual mileage face increased risk exposure and may pay higher rates. Insurance companies also consider local factors such as traffic patterns, road conditions, and weather risks specific to different regions of Tennessee when calculating rates.
How To Save Money on Auto Insurance in Tennessee?
Auto insurance is a significant expense for many drivers, with the average cost of full coverage in Tennessee per year. However, there are strategies that Tennessee drivers can employ to reduce their insurance premiums. These include:
Only Purchase the Necessary Coverage
One of the easiest ways to save on auto insurance in Tennessee is to purchase only the coverage that is legally required. While state law mandates minimum liability coverage, drivers often add extra coverage, such as collision and comprehensive.
If the value of a car is less than the total of the deductible and premiums for comprehensive and collision coverage, it may be more cost-effective to skip these additional coverages.
Pay Premium Upfront
Many insurance companies offer significant discounts to policyholders who pay their annual premium in full rather than monthly installments. This not only eliminates potential installment fees but also reduces the overall cost of the insurance. Some insurers in Tennessee provide a discount of up to 10% for paying in full.
Ask About Occupational Discounts
Certain professions are considered lower risk by insurance companies, and drivers in these fields may be eligible for occupational discounts. Teachers, engineers, and first responders often qualify for reduced rates due to their perceived lower likelihood of filing claims.
In Tennessee, this can be particularly beneficial for those working in prominent local industries such as healthcare, education, and music.
Explore Farm Bureau Insurance
Farm Bureau Insurance is known for offering some of the most affordable car insurance rates in Tennessee. With minimum coverage policies starting at around $33 per month, Farm Bureau provides a cost-effective option for many drivers.
Membership in the Tennessee Farm Bureau is open to all residents, not just those in rural areas or involved in agriculture.
Utilize Telematics Programs
Telematics programs, also known as usage-based insurance, involve installing a device in the car or using a mobile app to monitor driving habits. These programs reward safe driving behaviors with discounts. In Tennessee, where driving conditions can vary widely from urban to rural areas, telematics programs can be beneficial.
Take a Defensive Driving Course
Many insurance companies offer discounts to drivers who complete an approved defensive driving course, with savings typically ranging from 5% to 10%. These courses provide valuable refresher training on safe driving techniques and can be completed online for convenience.
In Tennessee, drivers over a certain age, such as 50 or older, may find this especially beneficial. Drivers enhance their driving skills and enjoy lower insurance rates, making it a win-win situation.
What To Do After an Auto Accident in Tennessee?
After an auto accident in Tennessee, drivers should take several important steps to protect their safety, legal rights, and ability to file an insurance claim. First, they should check everyone's safety by moving vehicles out of traffic if possible and calling 911 if there are any injuries.
Next, it is crucial to exchange information with the other driver(s) involved, including:
- Name
- Address
- Insurance company details
- Driver's license number
- License plate number
Additionally, gathering evidence at the accident scene is essential. This involves taking photos of vehicle damage and the accident site, getting contact information for any witnesses, and noting details like the time, date, location, and road conditions.
If police respond, drivers should ask for the officer's name and badge number and information on how to obtain the accident report.
Furthermore, even if injuries are not immediately apparent, it is advisable to seek medical attention promptly after the accident. Some injuries may not show symptoms right away, and having medical documentation can be important for insurance claims.
Lastly, drivers should notify their insurance company about the accident as soon as possible, even if they are not at fault. However, they should be cautious about giving recorded statements or accepting quick settlement offers without first consulting an attorney.
How To File and Claim an Insurance Coverage in Tennessee?
To begin filing insurance claims in Tennessee, individuals must thoroughly read their insurance policy, as this document serves as a guide to covered losses and claim procedures. Before proceeding, policyholders should consider the potential impact of filing a claim on their premiums and policy renewal.
Most insurers have a 24/7 claims service center where claims can be filed over the phone or online. For instance, Farm Bureau Insurance of Tennessee allows claims to be filed through their online account or by calling their service center.
When filing a claim, providing detailed information and documentation about the incident is necessary. This includes:
- Accident details
- Police report
- Photos and videos
- Witness information
- Insurance information
Once a claim is filed, an insurance claims adjuster is assigned to the case. The adjuster investigates the incident, assesses the damage, and determines the payout based on the policy coverage.
Insurers are required to handle claims fairly and in good faith, adhering to state laws and regulations. Policyholders must understand the timeline for claim resolution and any deadlines for submitting additional information or documentation.
Throughout the process, it is crucial to regularly follow up with the claims adjuster to check the status of the claim and ensure that all necessary steps are being taken. Keeping thorough records of all communications and documentation related to the claim can be invaluable if any disputes arise or the claim needs to be escalated.
What To Do if An Insurance Claim is Denied?
When faced with a denied insurance claim in Tennessee, policyholders have a few options for resolution.
The first step is to carefully review the denial letter to understand the specific reasons for the decision. It is crucial to gather comprehensive documentation to support the claim, including photos, videos, repair estimates, and all correspondence with the insurance company.
If policyholders cannot resolve the issue directly with the insurer, they can file a complaint with the TDCI. This can be done using the "Consumer Compliant" service tool on the TDCI website or by mailing documentation to:
Attn: Consumer Insurance Services
500 James Robertson Parkway, 10th Floor
Nashville, TN 37243
For additional assistance with insurance-related questions, the TDCI provides a consumer hotline at 615-741-2218 or 800-342-4029.