Tennessee requires every registered vehicle to carry liability insurance of at least 25/50/25: $25,000 for bodily injury to one person, $50,000 for bodily injury per accident, and $25,000 for property damage (Tenn. Code Ann. Sec. 55-12-102). Liability is the only coverage the state mandates. Everything else that protects your own car or your own medical bills, such as collision, comprehensive, and uninsured motorist coverage, is optional under Tennessee law and is usually added by choice or because a lender requires it. This page explains what each coverage does, how Tennessee's fault rules work, and what to verify on a policy.
What are Tennessee's minimum car insurance requirements?
Tennessee sets a floor called minimum liability. Liability coverage pays other people for injuries and damage you cause in an at-fault crash. It does not pay for your own car or your own injuries.
The state minimum is written as three numbers, 25/50/25 (Tenn. Code Ann. Sec. 55-12-102):
| Limit | Amount | What it pays for |
|---|---|---|
| Bodily injury per person | $25,000 | Injuries to any one other person you hurt |
| Bodily injury per accident | $50,000 | Total injuries to everyone in one crash |
| Property damage | $25,000 | Damage to the other party's car or property |
Tennessee raised this floor from 25/50/15 to 25/50/25 through Senate Bill 504, effective in 2023. The property-damage minimum went up by $10,000 because vehicle repair costs had climbed well past the old cap.
The floor gets tested fast in a real crash. A driver in Knoxville rear-ends a new pickup at a stoplight and causes $31,000 in damage. A policy at the state minimum pays $25,000 toward that repair, and the driver is personally responsible for the remaining $6,000. Higher liability coverage limits exist for exactly this gap, and a licensed advisor can talk through the right limit for a given situation.
What does each auto coverage actually do?
Most Tennessee auto policies combine several coverages. Each one solves a different problem.
- Liability pays other people for injuries and property damage you cause. Required in Tennessee.
- Collision coverage pays to repair or replace your own car after a crash, whether you hit another vehicle or an object like a guardrail. Optional under state law; often required by an auto lender.
- Comprehensive coverage pays for damage to your car that is not a collision: theft, fire, hail, flooding, vandalism, or hitting a deer. Optional under state law; often required by a lender.
- Uninsured and underinsured motorist coverage (UM/UIM) pays for your injuries when the at-fault driver has no insurance or not enough. Covered in its own section below.
- Medical payments pays medical bills for you and your passengers after a crash, no matter who caused it. Optional.
Collision and comprehensive both come with a deductible, the amount you pay out of pocket before the insurer pays the rest. A Memphis driver with a $500 deductible whose car is stolen and valued at $14,000 receives $13,500 from a comprehensive claim and covers the first $500. A lower deductible means a smaller out-of-pocket payment at claim time and a higher premium; a higher deductible flips that trade.
To see how these coverages work outside of Tennessee's specific rules, the general auto insurance overview walks through the same building blocks nationwide.
Does Tennessee require uninsured motorist coverage?
Tennessee does not require you to buy uninsured or underinsured motorist coverage, but the law requires insurers to offer it. Under Tenn. Code Ann. Sec. 56-7-1201, UM/UIM must be offered at limits equal to your liability limits, and you can reject it only in writing.
Uninsured motorist coverage steps in when the driver who hurt you has no insurance. Underinsured motorist coverage steps in when that driver has insurance, but their limits run out before your bills are paid.
This matters in Tennessee because uninsured drivers are common. The Insurance Research Council (IRC) estimates about one in five Tennessee drivers is uninsured. If a Chattanooga driver with no liability insurance runs a red light and injures you, your own liability coverage does nothing for your injuries, and there may be no policy on the other side to collect from. UM coverage is the part of your own policy built for that exact moment.
An example of the underinsured half: a Nashville crash leaves you with $70,000 in medical bills, and the at-fault driver carries only the state-minimum $25,000 in bodily injury. Their policy pays $25,000, and UIM coverage on your own policy can cover the gap up to your UIM limit. Because rejecting UM/UIM has to be in writing, it is worth checking whether a signed rejection is sitting in your file.
How does fault work in a Tennessee car accident?
Tennessee is an at-fault state, not a no-fault state. The driver who causes a crash, through their insurer, is responsible for the damage. Tennessee does not use personal injury protection (PIP), the no-fault medical coverage found in some other states.
Tennessee follows modified comparative negligence with a 49% bar, a rule set by the state Supreme Court in McIntyre v. Balentine (Tenn. 1992). Under that rule:
- You can recover damages only if you are less than 50% at fault. At 50% or more, you recover nothing.
- Your recovery is reduced by your share of the blame.
A concrete version: a jury decides your crash caused $40,000 in damages and finds you 20% at fault. You recover 80% of $40,000, which is $32,000. If the jury had put you at 50% or more, the 49% bar would leave you with nothing. This is why the way fault is assigned after a Tennessee crash directly changes what gets paid.
What is required versus what is optional in Tennessee?
The line between mandatory and optional is short, but a lender can add its own rules on top of the state's.
| Coverage | Tennessee legal status | Common real-world trigger |
|---|---|---|
| Liability (25/50/25) | Required by state law | Registering and driving any vehicle |
| Collision | Optional under state law | Required by most auto lenders and leases |
| Comprehensive | Optional under state law | Required by most auto lenders and leases |
| UM/UIM | Must be offered; rejectable in writing | Kept unless you sign a written rejection |
| Medical payments | Optional | Added by choice |
If you own your car outright, Tennessee only forces the liability piece. If you finance or lease, the lender usually requires collision and comprehensive until the loan is paid, because the car is their collateral. A driver in Franklin who pays off a loan may find the lender-required coverages become optional again at that point, and a licensed advisor can talk through what fits once the loan is gone.
What should you verify on a Tennessee auto policy?
A few details on the declarations page decide what actually gets paid after a crash:
- Liability limits. Confirm they are at least 25/50/25, and understand that the state minimum is a floor, not a target.
- UM/UIM status. Check whether the coverage is on the policy or whether a written rejection was signed. Under Sec. 56-7-1201 it defaults on unless rejected in writing.
- Deductibles. Know the deductible on collision and comprehensive, since that is your out-of-pocket share at claim time.
- Named drivers and use. Confirm every regular driver in the household is listed and that the stated use of the car matches reality.
- Lender requirements. If the car is financed, confirm the policy meets the lender's collision and comprehensive terms.
Two more Tennessee facts are useful when a claim goes sideways. If an insurer denies or delays a valid claim in bad faith, Tennessee law allows a penalty of up to 25% of the claim on top of what is owed (Tenn. Code Ann. Sec. 56-7-105). And if an insurer becomes insolvent, the Tennessee guaranty association covers outstanding claims up to $100,000 per claim (Tenn. Code Ann. Sec. 56-12-107).
Learn more
For the coverage mechanics that apply in any state, see the general auto insurance overview. Tennessee home and renters education is being built next. To learn who Olive Insurance Services, LLC is and the carriers we work with in the states where we are licensed, see about Olive Cover and our carriers page.