Tennessee Personal Lines Study Guide

Twenty-five of the hundred scored questions on the Tennessee Personal Lines exam come from a Tennessee-specific outline, and a disproportionate share of them land on one topic: when an insurer may end a policy, and how much warning it owes. Tennessee’s answer depends on three variables at once, which is precisely why it makes such good exam material.

The three variables

Every cancellation and nonrenewal question in Tennessee turns on:

1. Is the risk personal or commercial?
2. Is the policy inside or outside its first 60 days?
3. Is the insurer cancelling mid-term, or declining to renew?

Change any one and the number changes. Memorising a single figure guarantees you get roughly half of these wrong.

Cancelling a personal auto policy

For a personal automobile policy, T.C.A. §56-7-1303 sets two notice periods:

• Not less than 20 days’ written notice for ordinary grounds.
• Not less than 10 days’ notice if the cancellation is for nonpayment of premium, or if the policy has been in effect less than 60 days and is not a renewal.

That second branch is the one people miss. The ten days does double duty: it covers nonpayment, and it separately covers any cancellation of a policy still inside its first 60 days, for whatever reason. A five-week-old policy cancelled because the insurer discovered an undisclosed accident history gets ten days — and payment has nothing to do with it.

After 60 days, a Tennessee auto policy may be cancelled only on the grounds enumerated at §56-7-1302 — nonpayment, licence or registration suspension, fraud — and not simply because the insured made a claim.

Nonrenewal runs the other way

Here is the inversion that makes this topic worth real study time.

• Cancellation: a personal auto insured gets the longer notice — 20 days — while a commercial risk gets a flat 10 days after mailing, with no separate nonpayment split (§56-7-1804(b)).
• Nonrenewal: the commercial insured gets the longer notice — at least 60 days (§56-7-1805) — while a personal risk gets at least 30 days before expiration (§56-7-1901).

So “personal gets more warning” is right on cancellation and wrong on nonrenewal. There is no rule of thumb that survives both; you have to hold the grid.

The reason is given on request — and two different clocks run

For auto nonrenewal, Tennessee does not require the insurer to volunteer its reason. §56-7-1304 sets up an exchange, and each side has its own deadline:

• The insured must make the written request “not later than fifteen (15) days after the effective date of the nonrenewal.”
• The insurer must then, “within twenty (20) days,” mail a written statement specifying a reason.

Fifteen is the insured’s window; twenty is the insurer’s. “The reason must appear in the notice” is the obvious wrong answer, and “the insurer must respond within 15 days” is the subtler one. The same statute also fixes the auto nonrenewal notice itself at not less than 30 days.

What Personal Lines actually covers

The authority reaches property and casualty insurance sold to individuals for personal, non-commercial purposes — personal auto, homeowners, dwelling fire, renters, personal umbrella, watercraft. It does not reach business auto, commercial packages, BOPs or workers’ compensation. A producer holding both the Property and the Casualty lines already covers personal-lines risks, so the two do not stack: Personal Lines is the narrower choice, not an add-on.

Two facts about the market you are selling into

There is no operating FAIR Plan in Tennessee. A homeowner nobody will write goes to the surplus lines market, not to a state plan. Title 56 chapter 41 does carry standby machinery — a voluntary risk-sharing plan, and a Tennessee Property and Casualty Insurance Association the Commissioner may create if it fails — but nothing indicates either has been activated. Auto is different: the Tennessee Automobile Insurance Plan is live.

Credit-based insurance scoring is permitted, subject to §§56-5-201 to 56-5-207. The operative limit is §56-5-202: an insurer may not deny, cancel or non-renew personal insurance, or set renewal rates, “solely on the basis of credit information, without consideration of any other applicable underwriting factor independent of credit information.”