Tennessee Personal Lines Insurance License Exam — All Questions

What minimum auto liability limits must a Tennessee personal auto policy carry to satisfy the state's financial-responsibility law?

• a.$15,000 per person / $30,000 per accident bodily injury and $10,000 property damage
• b.$50,000 per person / $100,000 per accident bodily injury and $25,000 property damage
• c.$25,000 bodily injury per person, $50,000 bodily injury per accident, and $25,000 property damage✓
• d.$20,000 per person / $40,000 per accident bodily injury and $15,000 property damage

Tennessee sets minimum motor-vehicle liability limits of 25/50/25 - $25,000 bodily injury per person, $50,000 bodily injury per accident, and $25,000 property damage. These are floors; producers should offer higher limits to better protect the insured's assets. Source: Tenn. Code Ann. section 55-12-102; verify current figures with the Tennessee Department of Commerce and Insurance.

Instead of split limits, Tennessee's financial-responsibility law also lets a driver satisfy the requirement with a single combined-limit policy of at least:

• a.$50,000
• b.$65,000✓
• c.$100,000
• d.$25,000

Tenn. Code Ann. section 55-12-102 lets a driver meet the requirement either with 25/50/25 split limits or with a single combined single limit of at least $65,000 per accident covering bodily injury and property damage together. Source: Tenn. Code Ann. section 55-12-102.

How does Tennessee generally handle liability for auto accidents?

• a.It is an at-fault (tort) state - the driver who causes the crash is liable for the other party's injuries and damage✓
• b.It is a no-fault state where each driver's own PIP pays first regardless of fault
• c.Fault is never considered; claims are split 50/50
• d.Only the state fund pays auto claims

Tennessee is a traditional at-fault (tort) state, not a no-fault/PIP state: the driver who causes a crash is responsible for the other party's bodily injury and property damage, so liability limits and uninsured/underinsured motorist coverage matter. Source: Tennessee Department of Commerce and Insurance (https://www.tn.gov/commerce/insurance).

How are cancellation and nonrenewal of a personal auto or homeowners policy regulated in Tennessee?

• a.Insurers may cancel any policy at any time without notice
• b.Policies can never be cancelled once issued
• c.Only the insured may cancel; the insurer never can
• d.State law limits the permissible reasons and requires advance written notice of cancellation or nonrenewal✓

Tennessee law limits the reasons an insurer may cancel a personal auto or homeowners policy mid-term (such as nonpayment or material misrepresentation) and requires advance written notice of cancellation or nonrenewal. The exact number of days depends on the reason and line - verify current Tennessee notice periods with the Tennessee Department of Commerce and Insurance.

Which best describes the body that writes and enforces Tennessee's insurance regulations affecting personal lines policies?

• a.The Tennessee Department of Commerce and Insurance, under the Commissioner✓
• b.A private trade association of insurers
• c.The U.S. Department of the Treasury
• d.County insurance boards

The Tennessee Department of Commerce and Insurance, headed by the Commissioner, adopts and enforces the administrative rules and market-conduct standards that apply to personal lines insurers and producers in Tennessee. Source: Tennessee Department of Commerce and Insurance.