Commercial Auto Insurance Minimum Requirements in Tennessee

Determine Whether You Need Commercial Insurance

If you don’t post a cash bond or deposit, and you don’t self-insure, think about the following factors to help you decide whether you need commercial insurance:

• How many and what kind of vehicle(s) you need to insure

• How the vehicle(s) is being used

• Who drives the vehicle(s)

• Who owns the vehicle(s)

Usually, businesses that own multiple vehicles for business-related matters, and hire employees to drive those vehicles, need commercial insurance.

Consider the following situations; if any of them apply to you, you might need commercial insurance:

• Your business equipment cannot be removed from the vehicle(s).

• You or your business picks up and delivers goods and/or people.

• You have multiple vehicles used by craftsmen or skilled workers (aka artisan use).

• The coverage limits on a personal auto policy are not high enough.

• You need to protect your employees when they use your company vehicle(s) or their own vehicles on company time.

Still not sure whether you need commercial insurance? Contact the DOS for assistance.

Determine the Required Amount of Coverage

Once you determine whether you need commercial coverage, you need to determine how much commercial coverage you need. Discuss the following with potential insurance providers:

• Who owns the vehicle(s)

• Weight of the vehicle(s)

• Usage of the vehicle(s)

• Liability limits requirements

It might turn out that you can purchase the same coverage amounts the state requires for private passenger vehicle liability insurance. Those amounts are:

• $25,000 for one injury or death

• $50,000 for all injuries or deaths

• $15,000 for property damage for one accident

Remember, your insurance provider can help you choose commercial coverage that will meet the state’s requirements and your personal or business needs. You can also contact the DOS for specific information about commercial coverage if you’re having trouble determining the right amount for your situation.

Purchase a Commercial Policy

Many insurance providers offer both private and commercial coverage, so once you’re ready to buy commercial coverage, employ the same “shop around” mentality as you would if you were shopping for insurance for your own private vehicle.

Proof of Insurance and Financial Responsibility

Depending on how you establish financial responsibility for your commercial vehicle, you can show proof of insurance with:

• The insurance card, binder, or declaration binder your insurance carrier issues you.

• The certificate verifying you’ve posted the appropriate cash bond or deposit with the DOS.

• The certificate verifying you’ve self-insured under Section 55-12-111.

Penalties for Failure to Maintain Financial Responsibility

You could face the following if you fail to maintain financial responsibility:

• A Class C misdemeanor conviction.

• A fine of up to $100 (in some situations, it might be more).

• A suspended license.

• A STOP against your vehicle (this prevents you from renewing your registration).

Generally, you can rectify the situation when you pay your fine, obtain and show proof of financial responsibility, and reinstate your license; however, when it comes to having no proof of insurance or financial responsibility, penalties might vary on a case-by-case basis and it’s best to contact the DOS for specific details.