Tennessee Insurance Questions Answered

Tennessee Car Insurance FAQ

The average Tennessee driver pays $1,263 a year for car insurance. This is lower than the national average rate of $1,311. There is still plenty of room for savings. Shopping around for the best price has the potential to save you hundreds of dollars a year.

So what do Tennessee motorists get for their $105 month? They get the peace of mind that comes from knowing that if they are responsible for an accident while driving, they will not be hit with large financial losses.

Car insurance is a mixture of mandatory and optional coverage.

Required Car Insurance Coverage in Tennessee

In the state of Tennessee, your car insurance policy must include the following:

  • Liability insurance: This covers injuries and damage you may cause to others if you are responsible for a collision. You must have at least the following amounts of coverage:
    • Bodily injury liability coverage: $25,000 per person / $50,000 per accident
    • Property damage liability coverage: $15,000
  • Uninsured motorist insurance: This covers your injuries and property damage if you are in an accident caused by an uninsured driver. You must have at least the following amounts of coverage:
    • Bodily injury coverage: $25,000 per person / $50,000 per accident
    • Property damage coverage: $15,000

Optional Car Insurance Coverage in Tennessee

In addition to the mandatory coverage, most car insurance providers offer a variety of coverage options that you may want to consider. These include:

  • Collision insurance: This covers collision-related damage to your own vehicle, regardless of fault. It is often required by lenders until you have paid off your vehicle.
  • Comprehensive insurance: This covers non-collision-related damage to your own vehicle, such as may be caused by a windstorm, hail, or a flood. This is also typically required by lenders until you have paid off your vehicle.
  • Personal injury protection (PIP): This provides coverage for your own medical bills if you are injured in an accident, regardless of fault.
  • Towing and roadside assistance: This covers the cost of assistance if your vehicle becomes disabled while you are out on the road, such as if your engine overheats or you get a flat tire.
  • Rental car reimbursement: This can cover the cost to rent a vehicle while your own vehicle is being repaired following a covered event.

An independent insurance agent can review all your options with you and can help you review how much each will cost to include in your policy.

Yes. It is illegal to drive without insurance in Tennessee.

If you are caught driving an uninsured vehicle in this state, you can be charged with a Class C misdemeanor. If you are involved in an accident while uninsured, your charge will be bumped up to a Class A misdemeanor. Penalties for driving without insurance can include:

  • A fine of $300
  • The revocation of your driver’s license until you:
    • Provide proof of insurance, and
    • Retake and pass your driver’s license examination
  • A restoration fee of $65 to get your license back
  • A $50 fee to be paid to the commissioner of safety
  • The requirement to provide proof of insurance with an SR-22 certificate for three years

Despite these consequences, about 20% of all motorists in this state are driving uninsured vehicles. This is much higher than the national rate of 13%. This is why having uninsured motorist insurance in your car insurance policy can prove beneficial.

No. Tennessee is not a no-fault state.

This means that if you are in a collision, the person responsible for the accident is responsible for covering any resultant property damage and necessary medical treatment. If the at-fault driver does not have enough insurance to cover the costs, they will be expected to make up the difference out of pocket.

In no-fault states, your own insurance policy provides the first line of coverage for necessary medical treatment, regardless of fault.

No particular insurance company can be considered the best choice for all drivers. Each provider has its own method for assessing risk and calculating rates, so some may offer you better rates than others. That is why it pays to shop around for the policy that is ideal for you.

Independent insurance agents make comparison shopping easy. These agents have partnered with a variety of top-rated insurers, so they can obtain customized quotes on your behalf from each of them. That way, you can be sure you getting the coverage you need at a competitive price.

There are more than 360 independent agents in Tennessee. Find an insurance agent near you to learn more.

Tennessee Homeowners Insurance FAQ

On average, residents of Tennessee pay about $1,149 a year (or $96 a month) for their homeowners insurance coverage. This is slightly lower than the national average rate of $1,173 a year.

Of course, this is just an average. The actual cost of your policy will be based on several factors such as the size and value of your house, the weather risks and crime rate in your ZIP code, your claims history and credit score, and the size of your deductible.

Often, you can receive significant policy discounts by bundling your home insurance with other coverage like car insurance or life insurance.

Comparing rates from a few different insurance companies lets you be sure that you are getting your home insurance coverage at a competitive rate. Independent agents make comparison shopping easy.

Homeowners insurance is designed to provide you with the coverage you need if you experience property loss or damage, if severe damage make your home uninhabitable, or if you find yourself on the wrong end of a personal liability lawsuit.

Coverage for Your Property

Your home insurance policy can cover your property against many of the hazards you are likely to face as a homeowner in Tennessee. Covered risks include severe storms, tornadoes, hail, freezing temperatures, fires, and property crimes.

Your homeowners property coverage is divided into two parts:

  • Dwelling insurance: This covers the physical structure of your home, including its roof siding, foundation, and attached structures like garages and decks.
  • Contents insurance: This covers your personal property, including  furniture, electronics, flooring, and appliances.

While most risks faced by Tennessee homeowners are covered by this property insurance, damage caused by floods is not. Because of this, you may want to supplement your home insurance coverage with a flood insurance policy through the National Flood Insurance Program (NFIP). A local independent agent can help you secure an affordable policy.

Coverage against Loss of Use

Tennessee experiences an average of 29.1 tornadoes a year. Few can forget the devastating aftermath of the F4 tornado that struck Nashville in the spring of 2020. Disasters like tornadoes and structure fires can cause significant damage to your home, often making residential properties uninhabitable.

If your house is severely damaged by a covered event and you must seek accommodations elsewhere while repairs are made, your homeowners insurance can help.

Loss of use insurance can provide coverage for your temporary housing expenses, such as hotel charges, meals, and even extra miles driven to and from your job, until you can safely return to your house.

Coverage against Liability Lawsuits

Homeowners insurance also provides policyholders with personal liability coverage. This can cover your potential costs if you or someone in your household is responsible for someone else’s injuries or property damage due to an accident or negligence. Examples of times that this liability coverage can protect you include:

  • If a visitor in your home is severely injured in an accident
  • If your child breaks your neighbor’s window while playing ball in your backyard
  • If you accidentally injure someone while you are away from home
  • If your dog gets out and bites a delivery person
  • If you are accused of libel or slander

A local independent insurance agent can explain your homeowners liability coverage in greater detail.

You may find it difficult to decide how much coverage is enough when you are purchasing your homeowners insurance. The following guidelines may help:

  • Dwelling insurance: You will want to have enough coverage to enable you to rebuild a house of the same size in the event that your house is destroyed by a disaster like a tornado. Dwelling insurance coverage amounts are typically calculated by multiplying the size in square feet of your home by the average cost per square foot to build a house in your city.
  • Contents insurance: Most homeowners purchase contents insurance in an amount that is between 50% and 75% of their dwelling insurance coverage. If you have any especially valuable property or large collections, you may need to purchase additional endorsements in order to have this property fully insured.
  • Liability insurance: Most home insurance providers offer a minimum of $100,000 in personal liability coverage. If you have a lot to lose, you may want to consider bumping that coverage up to $300,000 or $500,000, if possible. You may be surprised how affordable it can be to significantly increase this coverage.

A local independent agent can provide you with guidance and advice as you determine how much homeowners insurance is right for you.

Homeowners insurance is not required by law. However, it is typically required by lenders if you have a mortgage or a home equity loan.

When you are still paying on your mortgage, you don’t technically own your house; your mortgage provider does. Your lender will therefore have a vested interest in making sure that the property is covered against potential loss and damage.

Likewise, when you use your house as collateral for a home equity loan or line of credit, your lender will want to make sure that the house is covered.

That is why mortgage lenders and banks will require you to provide proof of insurance for these types of loans.

When you own your house outright, homeowners insurance becomes optional. However, because for many people their home is their most valuable asset, most find it important to protect their investment.

The easiest way to find the best homeowners insurance company for you is by working with an independent agent. 

These agents aren’t tied to a single insurance company. Instead, they have partnered with a variety of highly rated insurance providers. Because of this, they can save you time and money by helping you find the coverage you need at the most competitive price.

There are more than 350 independent agents in Tennessee who are ready to help. Contact an agent near you to discover the many benefits of working with one of these experienced insurance professionals.

Tennessee Business Insurance FAQ

Business insurance rates can vary significantly from one business to the next. This is because they are based on several factors such as:

  • The type of business you own and the industry in which it operates
  • The size of your business, including  its average annual revenue and the number of employees it has
  • The value of your company assets
  • The liability risks faced by businesses in your industry
  • The crime rate and weather risks in the ZIP code where your business is located
  • Which, if any, coverage options you want to include in your policy package
  • The size of your deductible

Independent insurance agents can help you make decisions about which commercial insurance products are right for your business and which you can do without. They can also help you review and compare policy offerings and rates from a variety of insurance providers.

Let an experienced independent agent help you build a competitively priced business insurance policy package for your Tennessee business.

There are many ways that a business insurance policy package can protect your Tennessee business. The most common are through liability coverage, property coverage, income interruption coverage, and workers’ compensation coverage.

Business Insurance Provides Liability Coverage

Liability lawsuits against your business can be extremely expensive, even if the courts ultimately rule in your favor. That is why business liability insurance is a crucial part of every commercial insurance policy package.  It is designed to cover court costs, legal fees, and financial damages if your company is sued for a covered event.

All business insurance policies include commercial general liability insurance (CGL). This covers against many of the most common risks your business may face, including third party injuries and illnesses that may occur due to an accident on your business premises or a defect in a product your company produces, sells, or promotes.

Most businesses have liability coverage needs that go beyond what a CGL policy can cover. Fortunately, there are several additional commercial liability insurance products available for you to include in your business insurance policy package.

An independent insurance agent can help you identify all of your company’s liability exposures and can recommend the right insurance products to cover against them. That way, you can rest assured that your company is covered against all of the potential lawsuits it may face.

Business Insurance Provides Property Coverage

Commercial property insurance is also included in every business insurance policy. It is designed to cover against property loss and damage caused by most of the hazards you are likely to face as a business owner in Tennessee. These include structure fires, property crimes, and severe weather events like severe storms, tornados, and hail.

Depending on the nature of your business and its location, you may also benefit from purchasing supplemental property insurance policies such as:

  • Inland marine insurance: This is designed to cover your portable business property when it is in transit or when it is on location elsewhere, such as at a job site or in a warehouse.
  • Boiler & machinery insurance: This is designed to cover against losses related to mechanical malfunctions such as if a freezer in a restaurant stops working or a furnace stops providing heat to an office building in the winter.
  • Flood insurance: This is designed to cover against flood damage. It is important coverage for many businesses because flood damage is not covered by commercial property insurance. Business owners can purchase up to $500,000 in structural coverage and up to $500,000 in contents coverage when purchasing commercial flood insurance.

Independent agents in Tennessee can help you be certain that all of your business property is properly and sufficiently covered.

Business Insurance Can Provide Income Interruption Coverage

A disaster like a structure fire or a tornado can have significant ramifications. In addition to damaging property, it can force your business to remain closed for an extended period while repairs are made. This can be financially devastating for many small businesses. That's why business interruption insurance was created.

Business interruption insurance is optional coverage. It can ensure that if your company must shut down due to damage caused by a covered event, it can receive a continuation of income until your normal operations can resume. That way, your business can continue paying monthly bills, loan installments, and other regular expenses without sustaining a large financial loss.

Business Insurance Can Provide Employee Injury Coverage

As an employer, it is your duty to provide your employees with a safe and healthy workplace. Even so, workers sometimes get injured on the job or come down with occupational illnesses. When this happens, your company is responsible for covering any associated expenses. Workers’ compensation insurance can cover these costs.

In Tennessee, nearly all businesses with at least three employees are required to carry workers’ compensation insurance. This insurance is designed to cover all costs associated with medical treatment for employee injuries, including doctor visits, hospitalizations, medications, medical supplies, physical therapy, and disability pay.

Not only does workers’ comp shield your employees from facing large financial losses because of their injuries, it also protects your business from expensive liability lawsuits related to workplace injuries and illnesses.

You are not required by Tennessee state law to carry a business insurance policy.

However, there are times when you may be required to have certain types of insurance that are often included in business insurance policy packages. 

  • Commercial vehicle insurance is required by law if your company owns and operates a vehicle or fleet of vehicles.
  • Workers’ compensation insurance is required by Tennessee law for nearly all employers that have three or more employees.
  • Property and liability insurance may be required by lenders if you are applying for a commercial mortgage or a business loan.
  • Property and/or liability insurance may be required by your landlord if you are leasing your business space.

To learn more about the types of insurance that you may be required to carry, and to find these policies at the most competitive prices, you can talk with a local independent insurance agent who specializes in business insurance coverage.

Building a comprehensive business insurance policy package can be complicated, but it doesn’t need to be. When you work with a local independent insurance agent, your agent will be able to walk you through all of the various coverage types that may be appropriate for your particular business.

Because they live and work in your community, independent agents understand the risks you face as a business owner in your city, and they are familiar with Tennessee’s state laws and regulations.

Best of all, these agents are free to work with a number of different insurance partners. This enables them to easily shop around to find you great coverage at a competitive rate. There are more than 350 independent agents in Tennessee. Set up a one-on-one consultation with an agent near you to get more information.

Tennessee Workers’ Compensation Insurance FAQ

The cost for workers’ compensation coverage varies from one business to the next because it is based on several different factors. Your quoted rates will be assessed according to the number of employees you have, the types of jobs they do, your company’s overall payroll amount, and your company’s safety record. 

Rates in Tennessee tend to be slightly higher than the national average.

How is workers' comp calculated in Tennessee?

Every job is given a specific classification code. Workers’ compensation coverage base rates for each class code are overseen by the Workers’ Compensation Division of Tennessee and the Department of Labor and Workforce Development. The rates are set according to the likelihood that employees who do that particular job will be seriously injured at work. 

Insurance companies in Tennessee are required to use these base rates when pricing coverage. However, they are permitted to use experience modifiers and premium credits and debits when calculating costs. This can make rates vary by up to 25%.

The base rates are given in the amount per $100 of employee payroll that must be paid for workers’ compensation insurance. So, for example, a long haul trucker (class code 7229) is assigned a rate of $9.26. That means that if the worker earns $50,000 a year, the cost to cover them would be:

         Base Rate ($9.26) x Annual Pay ($50,000) / 100 =  $4,630 a year

What about experience modifiers and discounts?

An experience modification factor, or experience mod, is an additional factor that may be applied to your workers’ compensation premium calculation. It increases or decreases your workers’ compensation premium for a given year, depending on your company’s claims history.

Tennessee employers are eligible to receive an experience modification rating when they meet one of the following requirements: 

  • $9,000 in policy premium generated during the last year or last two years; or
  • $4,500 average policy premium generated for more than two years.

Your experience modification is a numerical representation of your actual losses compared with expected losses for businesses in your industry (roofing companies are compared with other roofing companies; restaurants are compared with other similar-style restaurants, etc.) 

The mod is applied to the Tennessee workers’ compensation premium as a debit or credit. 

  • Average mod: 1.0 = Does not impact your premium
  • Debit mod: Greater than 1.0 = Premium goes up
  • Credit mod: Less than 1.0 = Premium goes down

The premium calculation with an experience mod would then be:

           Base Rate x (Payroll/100) x Mod = Premium

So, using the example above, if the long haul trucker works for a company that has an excellent safety rating, they may have an experience mod of 0.7.  The cost for workers’ compensation for that trucker would be calculated as follows:

           Base Rate ($9.26) x Annual Pay ($50,000) / 100 x Experience Mod (0.7) = $3,241 a year

That equates to a savings of $1,389 a year for that employer. Companies with a lot of employees can save a great deal of money by having a solid safety history.

Additionally, private insurance companies are permitted to offer policy discounts and credits at their discretion. This enables them to remain competitive in a large field. It also makes comparison shopping beneficial.

Workers’ compensation is designed to cover the various costs that are associated with workplace injuries and occupational illnesses. In Tennessee, it will cover the following:

  • Medical treatment: Workers’ compensation will cover all reasonable and necessary medical costs as long as they are recommended by an authorized treating physician. Life-threatening injuries can be treated in an emergency facility, but ER visits for non-life-threatening injuries may not be covered by workers’ comp.
  • Travel reimbursement: If an injured worker must travel more than 15 miles one way for a medical appointment related to a work injury, workers’ compensation can provide compensation for miles driven.
  • Temporary total disability: If an injured employee must take more than seven consecutive days off work in order to recuperate from a work-related injury, they are entitled to weekly disability benefits of two-thirds of their average weekly pay over the previous year. Disability benefits will continue until the employee is cleared by their treating physician to return to work.
  • Temporary partial disability: If an employee is cleared by their authorized physician to return to work but in a limited capacity with restrictions, they are likely to earn less than they previously did. In this case, workers’ compensation will reimburse the injured employee for two-thirds of the difference in pay until they can return to their previous job.
  • Permanent total disability: If an employee suffers an injury that results in a permanent disability that leaves them unable to work, workers’ compensation will provide them with compensation of two-thirds of their pre-injury wages until they reach full retirement age and can begin collecting Social Security benefits. 
  • Permanent partial disability: If an employee suffers an injury that results in a permanent partial disability, such as the loss of a limb or an eye, but they are still able to work, workers’ compensation will provide them with compensation in the amount of two-thirds of their previous average weekly wage for a period of time commensurate with the nature of the injury.
  • Death benefits: In the event that an employee’s injuries are fatal, workers’ compensation will pay up to $10,000 toward burial costs. Benefits will also be paid to surviving family as follows:
    • If the employee left behind a spouse but no dependent children, the spouse will be entitled to long-term compensation of 50% of the worker’s average weekly wage over the previous year.
    • If the employ leaves behind a spouse and at least one dependent child, they will be entitled to receive long-term compensation of  two-thirds of the worker’s average weekly pay over the previous year.
    • If the employee leaves behind no spouse or dependents, workers’ compensation will award $20,000 to the employee’s estate.

Talk to a local insurance agent to learn more.

With few exceptions, all employers in Tennessee who have at least three employees are required to purchase workers’ compensation.  Employers and/or their insurance company must designate a panel of three authorized physicians from whom injured workers can receive medical treatment.

If an employee is injured at work and the injury is life-threatening, they can receive care in an emergency room and then transfer their care to an authorized physician once their injury is stabilized.

Whenever an employee is injured on the job or suffers an occupational illness, they should report their injury to their employer within 15 days. Their employer should provide them with an Employer/Employee Choice of Physician Form (Form C-42). This will indicate the doctor chosen to oversee the medical treatment. The employer will also open the workers’ compensation claim at this time.

Employees should pay nothing out of pocket. If they must take more than seven consecutive days off work, they can begin collecting disability benefits. If the injured employee requires more than fourteen days off work, the first week of recuperation time will also be compensated.

Talk to an independent insurance agent who specializes in workers’ compensation to learn more details about how this insurance works.

Occasionally, a Tennessee workers' compensation claim may be denied.

There are a number of reasons this may occur, such as:

  • If the claim was not submitted in a timely manner
  • If the injury was the result of a preexisting condition
  • If the insurance company believes the injury was intentionally self-inflicted
  • If the injured employee was under the influence of drugs or alcohol a the time of the accident

If you or one of your employees believe that a workers’ compensation claim was unjustly denied, you can appeal the decision.

You can do this by filing a Petition for Benefits Determination Form (PBD Form) with the Tennessee Bureau of Workers’ Compensation. This must be done within one year of the injury. The case will then be assigned to a mediation specialist, who will oversee an informal hearing and attempt to assist both sides in coming to an agreement.

Most workers’ compensation denial appeals are resolved in the mediation phase. However, if either side is not satisfied with the mediator’s recommendation, the mediator will transfer the case to the Court of Worker’ Compensation Claims and a hearing will be scheduled. At this point, you may want to consider obtaining legal representation if you have not already done so.

The Workers’ Compensation Judge will hear the case and issue a decision. If you are unhappy with this decision, you can appeal it to the Worker’s Compensation Appeals Board. This must be done within 30 days of the judge’s decision. A panel of three judges will review the case and issue a decision.

If you are not satisfied with the decision handed down by the panel, you can appeal to the Tennessee Supreme Court.

Some insurance companies are better than others when it comes to covering worker injuries in certain industries. A local independent insurance agent can offer you guidance and advice, and can shop around to find you great coverage at a competitive price.

There are close to 400 independent insurance agents located in Tennessee. Find an agent near you to begin your search for the best workers’ compensation insurance policy for your business.