Tennessee’s financial-responsibility law has stepped the property-damage minimum up over time. The figure that matters now is the one for proof required after December 31, 2022. Home insurance is separate, and a standard policy still does not cover flood. This page quotes the Tennessee Code. It is not a quote.
Auto minimumsHome exclusionsDeductiblesQuestions
The auto minimum is 25/50/25, or $65,000 combined
Tennessee Code section 55-12-102 defines proof of financial responsibility in layers by date. If proof is required after December 31, 2022, a split-limit policy qualifies at not less than $25,000 for bodily injury to or death of one person, $50,000 for two or more people in any one accident, and $25,000 for damage to property. A single-limit policy of not less than $65,000 applicable to one accident also qualifies. Older policies were allowed to renew into the new limit rather than being treated as uninsured on January 1.
Uninsured motorist coverage comes with the policy
Section 56-7-1201 says a policy covering a vehicle registered or principally garaged in Tennessee shall include uninsured motorist coverage. The limit equals the bodily injury liability limits on the policy. The named insured may reject that coverage in writing, or select a lower limit, but not less than the financial-responsibility minimum. Rejection should be in the file. A verbal “we don’t need it” is not what the statute describes.
Collision and comprehensive remain optional under the financial-responsibility law. A lender can require them until the car is paid off.
What a home policy leaves out
Tennessee does not require a home policy as a condition of owning a house. The mortgage company can. The covered causes of loss are whatever the form names. These three are the ones people most often think are included and then learn are not.
Flood
The Insurance Information Institute says a standard policy will not pay for flood. That includes rising creeks and surface water, which parts of Tennessee see apart from any coastal surge. Flood insurance is a separate policy. The home deductible does not unlock flood coverage.
Sewer or drain backup
A supply line that lets go is commonly a sudden discharge of water. A backup through a sewer, drain, or sump is a different cause of loss, and a typical form excludes it unless an endorsement adds a limit. The endorsement limit is often much smaller than the dwelling limit. Read that number on the declarations.
Ordinance or law
Rebuilding after a covered loss can trigger current codes for electrical, elevation, or sprinklers. Ordinance or law coverage is the part of the policy that pays the extra cost of that code work. Without it, the dwelling payment stops at repairing the damaged portion in like kind and quality. The declarations show whether an ordinance limit was added, and for how much.
A standard homeowners policy and a flood policy are two contracts. The Insurance Information Institute says a standard policy will not pay for damage caused by a flood. The same form usually treats sewer or drain backup, and the extra cost of meeting current building codes, as add-ons rather than part of the base dwelling coverage. The Texas Department of Insurance describes those two items that way in its home insurance guide. Forms in this state can be broader, so the declarations page is the list that matters.
How a claim deductible works
A deductible applies to a covered claim. The company pays the covered amount minus the deductible, and it does not pay more than the limit. You can carry one deductible for wind or hail and another for other losses. Paying the deductible does not turn an exclusion into coverage.
A dollar deductible
The Texas Department of Insurance explains the mechanic with a $1,000 claim and a $300 deductible. The company pays $700. On a larger repair, the same guide uses a $10,000 replacement-cost roof and a $2,000 deductible, and the company pays $8,000. Those are teaching examples. They are not a Tennessee requirement and they are not a Freedom price.
A percentage deductible
Some policies, often for wind or hail, use a percent of the dwelling limit instead of a flat dollar amount. If the declarations say 2 percent and the dwelling limit is $200,000, the deductible for that type of claim is $4,000. The percent is whatever the policy says. It is not a statewide minimum.
One claim, one deductible, then the limit
You do not pay the deductible on top of a bill the company has already paid in full. The company applies it to the covered loss and stops at the dollar limit for that coverage. You can have a different deductible for a different coverage. If the loss is excluded, the deductible never comes into play, because there is no covered claim.
Questions people ask
What auto insurance does Tennessee require?
For proof required after December 31, 2022, Tennessee Code section 55-12-102 allows a split limit of $25,000 for bodily injury to one person, $50,000 for bodily injury to two or more people, and $25,000 for property damage. A single-limit policy of at least $65,000 for one accident also qualifies.
Does Tennessee require uninsured motorist coverage?
It is on the policy unless you opt out. Section 56-7-1201 says the policy includes uninsured motorist coverage equal to the bodily injury liability limits. The named insured can reject it in writing or choose a lower limit, but not below the financial-responsibility minimum.
Does a Tennessee home policy cover flood?
A standard homeowners policy does not. The Insurance Information Institute says a standard policy will not pay for flood. You need a separate flood policy. Your declarations page controls what the home policy actually pays.
Does homeowners insurance cover sewer backup?
Usually not, unless you add it. A sudden leak and a sewer or drain backup are different. On a typical home policy, backup is an endorsement. Check the Tennessee declarations before a loss, not after.
What is ordinance or law coverage?
It covers the added cost of meeting current building codes when you repair covered damage. That extra cost is generally not in the base policy. The limit, if the company included one, is on the declarations page.
How does a deductible work on a claim?
The company subtracts the deductible from a covered claim and pays the rest, up to the limit. A $1,000 covered claim with a $300 deductible pays $700. That is an illustration of the math, not a Tennessee rate.
Where these figures come from
Tennessee Code section 55-12-102, proof of financial responsibility, including the limits after December 31, 2022.
Tennessee Code section 56-7-1201, uninsured motorist coverage.
Insurance Information Institute, standard homeowners coverage.
City pages that use these rules
Other state guides: Texas, Colorado, and Missouri.
Get a Tennessee quote
The Knoxville office is at 2160 Ellington Way. Call (800) 253-1482, or start a free auto quote or a free home quote.
