Financial Responsibility is often called the "Insurance Law" and is found at T.C.A .§ 55-12-139. Tennessee requires all drivers to show proof of valid insurance at the time a driver is charged with most motor vehicle violations or at the time of an accident when they must notify the police. See T.C.A .§ 55-12-139(b)(1)(A).

If the driver cannot show proof of insurance, they are cited with the original violation for which they were pulled over and the Financial Responsibility violation. T.C.A. § 55-12-139(e)(2) prohibits a judge from dismissing any violation of Financial Responsibility charge if the defendant did not have insurance at the time the citation was issued, even if the defendant later obtained insurance. The court should submit a Court Action Report indicating that the defendant was “guilty.”

If a defendant is convicted of the Financial Responsibility law, the conviction is sent to the Department of Safety. The Department of Safety will send a letter to the driver's last know address in its system requiring the driver to show proof of insurance to the Department of Safety. If the driver can show valid proof of insurance at the time of the citation then the Department of Safety will not suspend the driver's license. However, if the driver cannot show adequate proof of insurance to the Department of Safety for the date the citation was issued, the Department of Safety will suspend the driver's license and they must obtain valid insurance to be reinstated and pay a reinstatement fee to Safety.

If a defendant is able to show proof that he did have insurance in effect at the time the citation was issued, the court must dismiss the charge on a first offense. If so, the court cannot charge any fines, costs or fees. The court may dismiss upon second or subsequent offenses, but is not required to do so. T.C.A. § 55-12-139(e)(1).

The Municipal Court would lose jurisdiction if a person is not in compliance with the financial responsibility requirements at the time of an accident that resulted in bodily injury or death and such person was at fault for the accident. A person is at fault for an accident if the person acted with criminal negligence, as defined in § 39-11-106, in the operation of such person's motor vehicle.

If the driver of a motor vehicle fails to provide evidence of financial responsibility, a law enforcement officer may tow the motor vehicle as long as the officer's law enforcement agency has adopted a policy that describes the procedure for towing a motor vehicle.