Tennessee checks financial responsibility before registering vehicles

The state or county clerk must not process an initial vehicle registration unless the vehicle meets the financial responsibility requirements. This applies to applications for a vehicle's initial registration. Owners may provide an insurance document showing coverage for at least 30 days, or a one-year state certificate showing a required deposit, bond, or self-insurer status. Proof may be shown on a phone or another portable device. These rules take effect July 1, 2027. This section is repealed June 30, 2029.

The state imposes coverage failure fees and must suspend or revoke registration after a repeated failure to provide proof. These rules apply to vehicle owners or lessees who receive notices about failing to meet financial responsibility requirements. The coverage failure fee is $500, and the continued coverage failure fee is $1,000 in addition to the first fee. If a vehicle receives another notice within three years of its first notice, the owner or lessee who fails to provide satisfactory proof or a required statement must pay a $1,500 repeated failure fee, and the registration must be suspended or revoked. After a renewal notice, the state or county clerk must not process a renewal until the owner or lessee pays the required fees and provides the required proof. These rules take effect July 1, 2027.

A court limits certain noneconomic damages, such as compensation for pain and suffering, to $375,000. The cap concerns lawsuits for injury or death arising from a vehicle crash. The cap applies only if the plaintiff owns or leases the vehicle involved, that vehicle lacked required coverage at the time of the crash, and its owner or lessee received at least three notices about that vehicle in the prior three years. For catastrophic loss or injury, the cap is $750,000. It does not apply to a permitted driver who is not the owner or lessee, or to a passenger other than the owner or lessee. For a death claim, the deceased must have owned or leased the vehicle, and the other listed conditions must be met. A defendant seeking the cap must raise it as a defense and prove each condition. The cap applies to civil actions filed on or after July 1, 2027.

Auto insurers must send weekly policy information to the state or its designated agent, and the state insurance department must request data on certain canceled policies. The weekly reports are required from automobile liability insurers, with the listed vehicle exceptions. The cancellation data request goes to each insurer authorized to sell this insurance in Tennessee. Weekly reports must include insured vehicles' identification numbers and each policy's insurer code, policy number, and effective date. Insurers may report more often. The weekly reporting duty does not cover vehicles registered to the state or a political subdivision, or vehicles with certain special registrations. The insurance department's data request covers policies canceled within 60 days because the policyholder asked to cancel or failed to pay the premium. The weekly reporting rule takes effect July 1, 2027. The department requests cancellation data every six months from January 1, 2027, through December 31, 2028.