Handing your keys to a friend, a relative, or a neighbor is common. If that driver has a wreck, Tennessee law sets the order in which auto policies apply. Under Tennessee Code § 56-7-1101, when your car is being driven with your permission and within the scope of the permission you gave, your policy is primary.
The statute adds that any other coverage the driver may have does not apply until the limits of your policy are used up first. In plain terms, insurance generally follows the car before it follows the driver.
| Situation | Which coverage applies first under § 56-7-1101 |
|---|---|
| Someone drives your car with your permission, within the scope of that permission | Your (the owner's) policy is primary |
| The driver has their own auto policy | Their coverage applies only after your policy's limits are exhausted |
| Your car is at a business that stores, parks, services, or repairs vehicles | That business's garage policy is exhausted before your insurance applies |
| The owner's only coverage is a garage policy | The permitted driver's coverage is primary |
| A car leased under a written lease, where the lessee provides coverage | The lessee's coverage applies first; the lessor's coverage waits until those limits are exhausted |
Source: Tennessee Code § 56-7-1101.
Why your limits matter when you lend your car
Because your policy goes first, a serious crash by someone you trusted with your car can use up your liability limits before anyone else's policy comes into play. That is one reason to review your limits against the state minimum: Tennessee’s auto liability minimum is 25/50/25 — here is what TDCI’s Auto Insurance 101 page says.
The statute ties this rule to permission and to the scope of the permission granted. Whether a particular trip was within that scope is a fact question for the claim, so be clear with anyone who borrows your car about where and when they can drive it.
When your car is in the shop
The statute treats cars left with a business differently. When a vehicle that the business does not own is in the possession, custody, or control of someone in the business of storing, parking, servicing, or repairing vehicles, the owner's insurance does not apply until all insurance available under that business's garage policy has been exhausted.
Leased cars
For a vehicle leased under a written lease where the lessee provides the coverage, any other coverage available through the lessor does not apply until the lessee's coverage limits are exhausted. If you lease, the coverage you buy is the coverage that responds first.
Questions to ask before you lend your car
- What are my liability limits, and are they enough if someone else is driving?
- Does my policy exclude any household members or drivers by name? See your declarations page: TDCI glossary: what your insurance declarations page shows.
- Do I have collision coverage for damage to my own car? TDCI’s glossary separates collision coverage from comprehensive coverage.
- What happens if the other driver has no insurance? TDCI’s glossary defines uninsured and underinsured motorist coverage.
Related reading
- Rental car coverage while your car is being repaired: TDCI’s glossary explains rental reimbursement coverage after a covered auto repair.
- Rideshare gaps in personal auto policies: TDCI warns Tennessee TNC drivers about rideshare liability and personal-auto gaps.
- Crash report deadlines after a wreck: Tennessee drivers in many crashes must file a written report within 20 days, even when the other driver was at fault.
This article is informational only. It summarizes Tennessee Code § 56-7-1101 and does not promise coverage or eligibility. Your policy language and the facts of the claim control how coverage applies.
Related reading from All Seasons
- Tennessee’s auto liability minimum is 25/50/25 — here is what TDCI’s Auto Insurance 101 page says.
- TDCI’s glossary defines uninsured and underinsured motorist coverage.
- TDCI’s glossary separates collision coverage from comprehensive coverage.
- TDCI’s glossary explains rental reimbursement coverage after a covered auto repair.
- TDCI warns Tennessee TNC drivers about rideshare liability and personal-auto gaps.
- Tennessee drivers in many crashes must file a written report within 20 days, even when the other driver was at fault.
- TDCI glossary: what your insurance declarations page shows.
Free policy review
All Seasons Insurance Group offers a free personal policy review. Call 865-263-1400 or visit asigtn.com/get-a-quote/. This article is informational only and does not promise coverage or eligibility; your policy forms control. Seasons change. So should your coverage.
If my friend wrecks my car, whose insurance pays first in Tennessee?
Under Tennessee Code 56-7-1101, if the car was driven with your permission and within the scope of that permission, your policy as the owner is primary.
Does the driver's own auto policy ever apply?
The statute says other coverage available to the permitted driver does not apply until the limits of the owner's policy are exhausted.
What if my car is at a repair shop?
When a business that stores, parks, services, or repairs vehicles has your car, your insurance does not apply until that business's garage policy is exhausted.
What if the owner only has a garage policy?
Then the statute makes the permitted driver's coverage primary, and the garage policy waits until that coverage is exhausted.
How does this work for a leased car?
When a written lease has the lessee providing coverage, the lessee's coverage applies first and the lessor's coverage waits until those limits are exhausted.
Does permission have limits?
Yes. The statute applies when the car is driven with permission and within the scope of the permission granted.
What should I check before lending my car?
Review your liability limits, any named driver exclusions, collision coverage, and uninsured motorist coverage on your declarations page.
How can All Seasons help after reading this?
Call 865-263-1400 or visit asigtn.com/get-a-quote/ for a free personal policy review. Informational only; no coverage promises. Seasons change. So should your coverage.
