6 Things to Know About Tennessee’s Car Insurance Laws

September 14, 2022
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Tennessee residents, it is essential to familiarize yourself with car insurance laws specific to your state. Car insurance laws play a huge role when settling traffic accidents or personal injury claims. 

According to the Tennessee Financial Responsibility Law, you must be financially stable to fund damages in case of a car accident you might cause. Commonly, vehicle owners sign up for liability car insurance to comply with the Law. However, if you don’t have liability car insurance or comply with any of the state’s financial responsibility act, you may be liable for various penalties.

Therefore, this article addresses all you need to know regarding car insurance coverage, financial penalties, and automobile accident claims in Tennessee. 

1. Tennessee has a “fault” system for car accidents

Tennessee’s legal framework for automobile accidents is based on a “fault” system. It implies that the person who is at fault for causing an automobile accident is financially responsible for paying for:

  • Damages to the vehicles involved
  • Bodily harm to pedestrians, drivers, and passengers involved in the automobile accident
  • Lost wages due to the absence of work or unemployment for the victims of a car crash

The damages mentioned above are what the accused is responsible for. From a practical and legal perspective, your insurance company can step up and cover the losses if you are at fault for an automobile accident. 

2. Car Accident Claims

In Tennessee, victims of car crashes or other automobile accidents can file for a personal injury claim to seek financial compensation. It’s better to consult a lawyer who specializes in personal injury claims. Find a Chattanooga accident attorney who can review your case for free and help you file your claim if you are a resident of Chattanooga, Tennessee.

Specialized lawyers familiarize car accident victims with the entire legal procedure and the extent of financial compensation they may be eligible for. In case of suffering from bodily damage or vehicle harm after an accident, you can:

  • File an insurance claim with your car insurance provider, irrespective of which driver was at fault. Check with your insurance provider if you are eligible to seek personal injury protection or funds for covering medical care and damage. 
  • The second option is if you’re sure the other driver was at fault. File a claim with the other driver’s vehicle insurance provider. If they agree to compensate you for the damages incurred by the driver, negotiate a settlement that includes funds for medical and vehicle expenses. 
  • The third option is to consult an attorney to file a personal injury claim in court. Through this claim, you can hold the faulty driver accountable for their actions. Maybe the court would suspend their driving license to protect other drivers and passengers on the road. However, it isn’t sure that a lawsuit would offer the highest financial payout. It is something you must discuss with your lawyer.

In case of an accident where it is difficult to determine who exactly is at fault, you may not have the same number of options. 

3. Requirements for Car Insurance in Tennessee

As mentioned before, you must have car insurance to comply with the Financial Responsibility Law for Tennessee. Here are the minimum amounts for insurance coverage:

  • $25,000 liability coverage in case of physical injury or death in an accident caused by the driver or owner of the insured vehicle
  • $50,000 liability coverage to provide for total bodily harm or death caused in an accident by the insured vehicle’s driver
  • $15,000 liability coverage to pay for property damage caused by the owner of the insured vehicle

If the amount set by the policy isn’t enough to cover the damages caused by you or the driver at fault, you may be in a financial crunch. It is better to consult your insurance provider to prevent running down on your savings or auctioning off personal items to pay for financial damages.

4. What does the “liability coverage” cover?

The liability coverage provides for the victim’s medical expenses and property damages. The coverage may also provide financial compensation to other parties impacted by the accident, like pedestrians or passengers. In extreme car accidents, you may have to provide more coverage than the amounts listed above. 

Remember that liability coverage still applies if someone else is driving your insured vehicle. In accidents with rental vehicles, the liability coverage may still hold. 

It is important to note that liability coverage won’t provide for your own injuries or property damage after an automobile accident. Therefore, you may have to file a personal injury claim to get financial compensation for accidents where you are the victim. In an accident when no other driver or entity is at fault, your insurance coverage may provide collision coverage for repairs or replacement of the damaged vehicle. However, collision coverage varies depending on a vehicle financing agreement or lease regulations.

5. Other ways of complying with the Tennessee Financial Responsibility Law

Besides applying for vehicle insurance, Tennessee residents can set aside funds in a deposit account or bond. It ensures that you guarantee yourself as a “self-insurer” to provide for property and other damages caused by an automobile accident.

You can also show digital proof of compliance with the Financial Responsibility Law in Tennessee. For example, it could be at a stop sign or after a vehicle accident. However, carrying a physical copy of the insurance card and other documentation guaranteeing compliance with the law is advised.

6. Penalties for violating the Tennessee Financial Responsibility Law

If you fail to comply with the state law, you may have to face the following penalties:

  • A Class C conviction of a misdemeanor is punishable by a fine of $300
  • Towing of your vehicle, or
  • Suspension of your driver’s license

These penalties include the financial and physical damages you would encounter after a car accident and don’t have insurance.

Conclusion

If you’ve been in an automobile accident in Tennessee, you may need more than these car insurance rules. The aftermath of an accident differs depending on your situation, whether you are a victim or caused the accident. You may have to contact a personal injury lawyer and meet your insurance provider for more details.

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