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Indiana Auto Insurance Laws

Updated on
November 19, 2020
Article written by
Attorney Kevin O'Flaherty

In this article, we will discuss Indiana Auto Insurance Laws and answer the following questions:


  • Who is liable in a car accident in Indiana?
  • What minimum and maximum coverage does Indiana law require?
  • What is a request for financial responsibility verification?
  • What are the penalties for driving without proof of insurance in Indiana?
  • How does Indiana handle uninsured drivers?


Indiana drivers are required by law to maintain financial responsibility for any motor vehicle accident they might cause. Furthermore, to be considered a “legal” driver, Indiana residents must carry a minimum amount of liability insurance. Motorists have several options when shopping around for auto insurance, but many opt for the minimum coverage required by law. However, most don’t understand the laws behind car insurance and why the “limits” exist.


Who Is Liable In A Car Accident In Indiana?


Like many states, Indiana follows an “At Fault” model, meaning that liability for a car accident, and any associated costs for repair, medical bills, etc, is on the driver who caused the accident. While instances of equal fault happen in some motor vehicle accidents, the great majority have one party at fault. The car insurance of the at-fault driver should absorb those costs up to the policy limit, and minus any deductible.


Indiana drivers that suffer damages from a car accident can proceed in one of three ways:


  • File a claim with their own insurance company. If they are not at-fault their insurance will likely pursue a subrogation claim against the other driver’s insurance carrier;
  • File a third-party claim with the at-fault driver’s insurance carrier;
  • If all else fails, the driver can file a lawsuit against the at-fault driver in civil court


What Minimum And Maximum Coverage Does Indiana Law Require?


Under Indiana’s motor vehicle insurance laws, drivers must carry liability car insurance coverage at the following limits (minimums and maximums):


  • $25,000 minimum for bodily harm or death of one person involved in an accident caused by the insured driver;
  • $50,000 minimum for total bodily injury or death of all involved in an accident caused by the insured driver;
  • $25,000 for any property damage per accident caused by the insured driver;


These minimum limits cover any injuries, vehicle damage, pedestrian injury, or other property damage caused by the insured driver. Indiana law doesn’t mandate a maximum coverage amount and coverage limits are based on the individual policy. Typically, higher limit policies will have a higher premium, but also come with other perks, like safe driver discounts. Once the policy limit is exhausted, the at-fault driver is legally responsible for the remaining costs. If one considers the cost of car repairs, medical care, and possibly property damage, we see that even though the minimums make a driver legal, they don’t guarantee financial protection. Most policies also cover family members driving your vehicle and rental car usage.


It’s also important to remember that the minimum coverage doesn’t apply to vehicle damage or injuries sustained by the at-fault driver. If there wasn’t another driver involved who was at-fault, a policy must contain additional protection to cover these costs.


What Is A Request For Financial Responsibility Verification?


A request for financial responsibility verification is how the Indiana Bureau of Motor Vehicles confirms that a driver who has been in an accident has the financial responsibility to continue to legally drive. These requests are sent out by the IBMV in the following situations:


  • A driver commits a misdemeanor or felony traffic violation;
  • The report from a car accident is filed with the IBMV; or
  • Too many “pointable” moving violations in a given period or a “pointable” violation after your driving privileges were previously suspended.


Those who receive this request must have their insurance carrier file a Certificate of Compliance with the IBMV.


What Are The Penalties For Driving Without Proof Of Insurance In Indiana?


If you’re pulled over In Iowa and found to be driving without proper auto insurance you can expect your license to be suspended for 30 days up to 1 year, a fee of $250 or more to have license reinstated, and you may be required to file an SR-22 for, which is a document proving you have the legally required minimum auto insurance for Indiana.


How Does Indiana Handle Uninsured Drivers?


All auto insurance options must include uninsured motorist coverage at the same minimum requirements listed above, plus extra for bodily harm or death by an uninsured driver. However, this can be waived in writing by the policy purchaser. Whether you have auto insurance or not you are always on the hook for an accident you caused when driving in Indiana.


Indiana Auto Insurance Laws
Author

Attorney Kevin O'Flaherty

Kevin O’Flaherty is a graduate of the University of Iowa and Chicago-Kent College of Law. He has experience in litigation, estate planning, bankruptcy, real estate, and comprehensive business representation.

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