Tennessee's New Auto Insurance Laws: Uninsured Fees Jump From $25 to as Much as $1,500

In May 2026, Governor Bill Lee signed two laws that reshape auto coverage in Tennessee — one building an insurance framework for app-based delivery driving, the other sharply raising the penalties for driving uninsured.

What does Public Chapter 1077 change for uninsured drivers?

The law also, in narrow cases, limits what a repeat-uninsured driver can recover after a crash, and it spells out how each fee is split among the county clerk, the Department of Safety, and a state uninsured-motorist fund. The fee increases and damages cap take effect July 1, 2027; the insurer-reporting changes took effect on signing.

What does Public Chapter 1011 mean if you drive for a delivery app?

Starting January 1, 2027, delivery network companies and their drivers must carry coverage while drivers are working. Just as important: the law gives personal auto insurers a clean exit. A Tennessee insurer may exclude all coverage — and the duty to defend — for a loss during the delivery availability period, across liability, uninsured and underinsured motorist, medical payments, comprehensive and collision. Existing business-use and delivery exclusions stay in place. An excluded claim can seek recovery from the delivery company's insurer.

Who needs to act on this?

• Anyone delivering food or packages in a personal vehicle in Sevierville, Knoxville or anywhere in East Tennessee: your personal policy likely does not cover you while the app is on. Ask for a business-use endorsement or a rideshare/delivery endorsement.
• Drivers who let coverage lapse between paychecks: a $25 nuisance fee is becoming a $500–$1,500 problem plus a registration hold. A lapse also re-rates you as a new customer at renewal, usually 10–25% higher.
• Households with teen drivers: verify every titled vehicle is listed. Registration-level penalties hit the vehicle, not just the driver.

Are Tennessee auto rates finally stabilizing?

Some analysts think the sharp increases of the last few years are beginning to slow in certain markets, though premiums remain well above where drivers want them. Stabilizing is not falling — the practical move is still to shop coverage at renewal rather than assume your renewal offer is the market price.

Sources: Tennessee Public Chapter 1011 and Public Chapter 1077, signed May 2026 (Insurance Business, June 1, 2026); Tennessee auto rate market commentary, June 2026.