It doesn’t cost much to insure your vehicle in The Volunteer State. In fact, monthly car insurance premiums in Tennessee are about $116, or $9 less than the average of $125. This puts Tennessee in a tie with Nevada for the 28th-highest premium rates in the nation. You could save even more money simply by shopping around. Insurance companies develop unique formulas for calculating rates based on factors such as your age, driving record, vehicle make and model, and ZIP code. The only way to find the lowest rate and the best car insurance for your situation is to get several insurance quotes and compare them.
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An online quote should take only five minutes or so. If you don’t know your annual mileage or your driver’s license number, look those up before getting started. You can also call for a quote, but that’ll take a little longer, probably about 10 minutes per call. And if you’re dealing with an independent agent, you may have to wait for an agent to give you a call back with the quote.
Our Top 4 Picks for the Best Cheap Car Insurance in Tennessee
Each of the above companies has strong financial strength ratings and excellent customer service, per A.M. Best and J.D. Power, respectively. A.M. Best measures a company’s long-term financial stability and a high score from the firm is a good sign the insurer will be able to pay out claims when necessary. J.D. Power is an internationally known organization that measures customer satisfaction across a variety of industries. It publishes a yearly report on auto insurers. All of the companies listed here earned at least three stars in the most recent survey.
Tennessee’s Minimum Coverage Requirements for 2020
Tennessee residents are required to carry $25,000 of bodily injury coverage per person and $50,000 per accident, plus $15,000 of property damage liability coverage. This is in line with what most states require, though the property damage requirement is a bit below average.
Auto loans come with their own insurance requirements in order to protect lenders. While the requirements will vary from lender to lender, comprehensive coverage and collision are often required if you want to secure a loan for a car.
The best car insurance is not just cheap car insurance. Consider this:
- The average driver has an accident every 17.9 years.
- The average cost of a disabling, nonfatal injury is $93,800, according to the National Safety Council.
- If you have cheap car insurance and hit someone and that person incurs a $94,000 injury, you could be held responsible for anything over your $25,000 bodily injury policy limit. Do you have almost $70,000 lying around? Would it drain your savings or retirement account if you had to pay such an amount?
Raising your policy limits to $50,000/$100,000/$25,000 would cost you an extra $20 a year with Progressive. That still wouldn’t be enough to cover all the damages in the accident above, but it would mean less money out of pocket.
Uninsured drivers are not uncommon in Tennessee. In 2015, the state ranked fifth in the nation for the percentage of uninsured motorists — a whopping 20 percent! It’s wise to invest in uninsured motorist coverage. Without it, you risk paying to fix damages that weren’t your fault. Underinsured motorist coverage goes hand in hand with this. The minimum liability coverage isn’t enough in every accident, and in cases where the at-fault driver’s insurance won’t cover the full cost of the damages, underinsured motorist coverage will pick up the balance.
You may also want to think about comprehensive and collision coverage, though it’s not required by law. If you have a lease or loan on your vehicle, your lender will require it. Collision coverage pays for damage to your vehicle caused by an accident with another driver, regardless of whether you were at fault. Comprehensive coverage pays for damage caused by natural disasters, theft, vandalism and run-ins with deer or other wildlife.
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Why are Tennessee’s insurance rates low?
Tennessee is a largely rural state, and this works in its favor when it comes to auto insurance. With people more spread out, the chances of fender benders, vandalism and auto thefts go down, as do auto repair costs and medical costs. These are all good things to insurance providers. City residents can expect higher premiums because they are more likely to file claims. Fender benders and auto theft are more common in densely populated urban areas than they are in rural areas. This affects insurance rates.
Tennessee residents statewide may see a decrease in their average premiums if penalties for uninsured driving are enforced. Fewer uninsured motorist claims will lessen the risk of insuring Tennessee drivers, which could result in big savings for those with good driving records.
What if you’re not a full-time resident?
If Tennessee is your primary state of residence, you must comply with state auto insurance laws, regardless of whether you live there year-round. If you’re not a resident, you may operate your vehicle for a period of 30 consecutive days without registering it. If you’re staying longer than that, you must register your car and purchase auto insurance that meets the state minimums. The exception is military personnel, who may maintain their home state registration while on active duty.
What is SR-22 insurance?
SR-22 insurance is a type of high-risk insurance for motorists who have driving records with serious offenses, such as DUI, driving without a license or insurance, or chronic infractions. In some cases, you cannot get a suspended license reinstated without the SR-22, which your insurance company files for you with the state. It’s also usually expensive to get an SR-22.
What is no-fault insurance?
No-fault insurance pays for injuries or damages incurred by the owner of the policy, regardless of who was at fault in the accident. It is intended to result in faster claims processing because each party’s insurance company is paying for their customer’s damages. Tennessee is not a no-fault insurance state.
What are the penalties for being uninsured?
Tennessee used to be one of the most lenient states about driving uninsured. As a result, 1 in 5 drivers flouted the mandatory insurance laws. But new laws have been enacted to crack down on uninsured drivers. You can now expect a minimum $300 fine and your vehicle may be towed. Repeat offenders will see even higher fines and suspension of their vehicle registration, with a $300 fee to get it reinstated.
Shop for a New Policy Every Couple of Years
Few people know it, but shopping habits impact insurance rates. Essentially, insurers look at your online shopping habits and other factors and determine whether you’re likely to leave them for a different insurer. If that risk is high, they’ll offer you a competitive price, but if it’s low, you may end up paying a higher rate because the company believes you’ll pay it without question. It’s a process called price optimization, and it’s caused quite a controversy.
Shopping around for new coverage every year or two helps you avoid being labeled as complacent by the insurer’s algorithms. This way, you’ll get quotes that accurately reflect your risk as a driver. That risk changes over time, so you may find in a year or two that your rates are much cheaper than they are today. For example:
- Good drivers will get steep discounts from other companies looking to pull loyal customers from competitors.
- Young drivers will get bigger discounts as they move out of the highest risk categories.
- Drivers with bad credit get quicker insurance savings as their credit scores increase.
Fifteen states have banned insurers from using price optimization when calculating rates, but Tennessee is not one of them. So for the time being, it’s up to you to make sure you’re not paying a higher rate than necessary.
Best Car Insurance in Tennessee
- Tennessee Farm Bureau
- State Farm
- Auto-Owners Insurance