Tennessee Auto Insurance Regulations Impacting Gig Economy and Uninsured Motorists
Tennessee has implemented substantial changes to its auto insurance regulations with new legislation impacting gig economy drivers and uninsured motorists. In May 2026, Governor Bill Lee signed two pivotal laws designed to reshape the auto insurance landscape within the state. These laws introduce specific insurance requirements for delivery app drivers and amend penalties for those driving without insurance.
Insurance Requirements for Gig Economy Drivers
Public Chapter 1011 addresses insurance for delivery network companies (DNCs) and their drivers who use personal vehicles for goods delivery. Effective January 1, 2027, this law mandates that DNCs and their drivers maintain liability insurance during defined operational periods. The legislation differentiates between a "delivery availability period" and a "delivery service period," requiring liability coverage at minimum thresholds of $50,000 per individual injured, $100,000 per accident, and $25,000 for property damage.
A key provision is that if a driver's personal insurance lapses, the DNC's policy must provide primary coverage from the claim's inception. Personal auto insurers in Tennessee may exclude coverage during these periods, freeing them from defending or indemnifying such losses. Furthermore, DNCs must notify drivers in writing about the company's coverage and the potential absence of their personal policies during work periods.
Addressing Uninsured Motorists
Public Chapter 1077 targets uninsured motorists with increased fines and operational changes. The fine for not maintaining insurance rises from $25 to $500, with repeat offenses seeing penalties up to $1,500 and potential suspension of vehicle registration. Additionally, noneconomic damage caps are set at $375,000 for certain uninsured drivers involved in accidents, escalating to $750,000 in catastrophic cases, particularly applicable to vehicle owners with multiple prior noncompliance notices.
The law also requires auto insurers to submit regular data reports to the Department of Revenue following the Insurance Industry Committee on Motor Vehicle Administration (IICMVA) model. Insurers must report details like vehicle identification numbers and policy information weekly and provide semi-annual reports on policy cancellations within 60 days of issuance, effective until December 2028.
The changes under Public Chapter 1011 take effect January 1, 2027, while the fee structure and damage caps in Public Chapter 1077 begin July 1, 2027. With insurer reporting requirements already active, these measures significantly alter regulatory compliance requirements and risk management strategies within Tennessee's auto insurance market.