Tennessee's top court has handed UM carriers a clean win, ruling uninsured motorist lawsuits are personal injury cases – with no prejudgment interest.
The Tennessee Supreme Court ruled on May 12, 2026 that Cinda Haddon, who was driving through an intersection when Ladarius Vanlier turned through it and hit her vehicle, cannot collect prejudgment interest on her $320,000 jury award. Her uninsured motorist carrier, Auto-Owners Insurance Company, had defended the case after Vanlier could not be served with process.
The $320,000 itself was not in dispute. The jury had broken it down to the dollar: $100,000 for past pain and suffering, $10,000 for future pain and suffering, $30,000 for past loss of ability to enjoy life, $10,000 for future loss of ability to enjoy life, $9,735.43 for permanent injury, and $160,264.57 for past medical expenses. Every dollar, the court said, stemmed from Haddon's personal injuries.
The fight was over what kind of case this really was. Tennessee allows prejudgment interest – extra money to make up for the delay between filing and payout – in contract cases but not in personal injury cases. So if a UM lawsuit counts as a contract claim against the insurer, the plaintiff can ask for it. If it counts as a tort claim against the driver, she cannot.
Haddon argued contract. She pointed out that Auto-Owners had filed a string of contract-based defenses, including reserving the right to raise any policy defenses, policy violations, or breach of conditions of the policy. She leaned on a 1966 Tennessee Supreme Court case, Schleif v. Hardware Dealer's Mutual Fire Insurance Co., where a UM suit was treated as a contract action.
The court was not convinced. Justice Mary L. Wagner, writing for a court joined by Chief Justice Jeffrey S. Bivins and Justices Holly Kirby, Sarah K. Campbell and Dwight E. Tarwater, applied Tennessee's two-part gravamen test – a tool used to figure out what a lawsuit is really about, regardless of how the parties label it. The test looks at the legal basis of the claim and the type of injuries for which damages are sought.
The court found Haddon's complaint alleged ordinary negligence by Vanlier – failing to keep a proper lookout, pay attention, keep his vehicle under control and yield the right of way. There were no allegations of a contract breach. Auto-Owners had never denied coverage. And UM carriers, the court noted, are not contractually obligated to pay their insureds until the tortfeasor is found legally liable. Until the at-fault driver loses, there is no contract to breach.
On the type of injury, the damages were all personal: medical bills, pain and suffering, lost enjoyment of life, lost earning capacity and permanent disfigurement. The jury verdict form had no slot for contract damages.
Schleif did not save Haddon, the court said, because in that case the carrier had actually denied coverage. Her case, by contrast, was about Vanlier's fault, not Auto-Owners' policy.
The court also flagged a policy concern. The UM Act, it noted, gives an insured only the protection she would have had if the at-fault driver had bought liability insurance in the first place. Allowing prejudgment interest in UM cases would let plaintiffs benefit from the happenstance that the actual tortfeasor was uninsured or could not be served.
The Court of Appeals had ruled the other way, calling UM suits contract claims and sending the case back to figure out the interest. The Supreme Court reversed and reinstated the trial court's denial. Costs were assessed against Haddon.
The American Property Casualty Insurance Association, the National Association of Mutual Insurance Companies and Tennessee Farmers Mutual Insurance Company all filed amicus briefs – a sign the industry treated the question as a serious one for the UM book of business in Tennessee.
