Tennessee sits in a comfortable middle position on the national cost ranking for car insurance. Full coverage averages $103 per month here, compared to a national average of $124 per month according to MoneyGeek’s June 2026 data. That puts the state 15th most affordable in the country, about 15% below what the average American driver pays. Drivers in Tennessee pay roughly $260 less annually than the national average for full coverage.
That is the headline. The more useful story is what sits underneath it.
Where Tennessee Lands Against Its Neighbors
Tennessee’s advantage over the national average becomes clearer when you compare it against surrounding states:
Georgia averages $135 per month for full coverage. North Carolina runs around $95. Kentucky sits around $97 per month. Alabama comes in at approximately $104 per month. Mississippi is among the most expensive in the South. Missouri runs around $128 per month.
Tennessee sits near the lower end of the Southeastern range, more affordable than Georgia, Mississippi, and Missouri, roughly comparable to Kentucky and Alabama.
The comparison that matters more for most drivers is not Tennessee versus the national average but Tennessee versus the states they might consider moving to or from. Florida runs more than double Tennessee’s statewide average. Nevada and Louisiana are among the most expensive states in the country. Texas runs around $241 per month for full coverage. Against those comparisons, Tennessee looks meaningfully more affordable.
What Minimum Coverage Actually Costs Here
The national average for minimum liability coverage is roughly $79 per month. Tennessee minimum coverage averages around $47 per month, or $564 per year. That is about 40% below the national minimum average.
Tennessee’s minimum requirements are 25/50/25: $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 for property damage. Those limits were set some time ago. Medical costs have risen significantly since the thresholds were established, which is why most drivers who understand the exposure carry higher limits rather than the legal floor.
The practical gap between minimum and full coverage in Tennessee is $56 per month on average, or about $672 per year. That is smaller than in most states, which is part of why many Tennessee drivers find full coverage worth carrying even on older paid-off vehicles.
What Is Pushing Rates Up From Where They Would Otherwise Be
Tennessee rates are lower than the national average, but they are not low in any absolute sense. A few state-specific factors keep them elevated above what they might otherwise be.
The uninsured driver rate in Tennessee is approximately 21.3%, ranking fifth-worst nationally. Every insured driver in the state is essentially absorbing some of the cost generated by that population through higher baseline rates. When an uninsured driver causes an accident, the costs ripple outward.
Vehicle theft in the major metros has stayed elevated. Car thefts in Nashville and Memphis jumped 15% in 2023, and while the numbers have moderated somewhat since, comprehensive coverage costs in those cities reflect the historical and ongoing theft exposure.
Tennessee also has a higher rate of fatal crashes than the national average, and the highest number of alcohol-related traffic fatalities in the country per Insurify’s 2026 analysis. Higher crash severity translates to larger average claim payouts, which feeds into what insurers charge across the entire market.
The City-Level Picture Matters More Than the State Average
The statewide figure of $103 per month becomes less useful when you compare specific cities. Memphis averages between $142 and $174 per month depending on the source and the profile. Bristol, in far East Tennessee, averages around $78 to $84 per month. That is a gap of up to $96 per month for identical coverage, or roughly $1,152 per year, between two cities in the same state.
This city-level variation exists because insurers price based on local accident frequency, theft rates, and claim history rather than statewide averages. A Memphis ZIP code and a Johnson City ZIP code carry entirely different risk profiles that produce entirely different rates.
For Tennessee drivers who have recently moved, are considering a move, or have not shopped their policy in the past year, that variation is worth understanding before renewing.
Rate Trends in Tennessee: 2023 to 2026
Like most states, Tennessee saw steeper increases in 2023 and 2024 driven by repair cost inflation, supply chain effects on parts, and increased medical claim costs. Several carriers in the state filed flat changes or small rate decreases in late 2025 and early 2026 according to CoverageAdvisor’s tracking, which suggests the most aggressive phase of increases is behind most carriers.
Tennessee’s statewide full coverage rate increased to approximately $1,700 annually during that period. The rate of increase slowed considerably heading into 2026, though the elevated baseline remains.
Making the Comparison Work for Your Situation
The national average and the statewide average are reference points, not predictions of what any individual driver pays. Age, driving record, credit history, vehicle, ZIP code, and coverage level all move the number significantly in either direction from the average.
Drivers looking at auto insurance quotes in Tennessee can compare coverage options and pricing based on their specific profile rather than relying on statewide averages that may not reflect their actual risk category.
