Auto Insurance In Indiana: What's The Law?

Indiana requires all drivers to have auto insurance. The Indiana Motor Vehicle Code requires drivers to carry liability auto insurance with minimum coverage of $25,000 for bodily injury to or the death of one person, $50,000 total for bodily injury to or the death of two or more people, and $25,000 for property damage. This basic coverage pays the medical and property damage bills of drivers, passengers, and pedestrians injured or affected by a car accident.

Indiana's minimum liability insurance requirements

Indiana requires all drivers to have liability car insurance. This covers the other car and its passengers if you are found to be at fault for an accident. The minimum coverage requirements in Indiana are:

• $25,000 for bodily injury liability per person in an accident, with a total of $50,000 for two or more people. This covers the cost of injuries or death.
• $10,000 for property damage liability per accident.

These minimum requirements are not meant to be a cap on how much coverage you can or should get. You may opt for more coverage to protect your financial assets and your vehicle and passengers.

The Indiana Motor Vehicle Code requires every driver to carry liability auto insurance with these minimum coverages when driving. However, if you can prove your financial responsibility in another way, the Indiana Bureau of Motor Vehicles (BMV) will consider your duty fulfilled. For example, you can provide a surety bond or make a cash/security deposit.

Proving financial responsibility

Indiana requires all drivers to prove financial responsibility. This can be done by purchasing car insurance that meets the state's minimum coverage requirements. The Indiana Motor Vehicle Code requires every driver to carry liability auto insurance with at least the following minimum coverages:

• $25,000 for bodily injury or death of one person in an accident caused by the driver of the insured vehicle
• $50,000 for total bodily injury or death liability in an accident caused by the driver of the insured vehicle
• $25,000 for property damage per accident caused by the driver of the insured vehicle

This basic coverage pays the medical bills, property damage bills, and other costs of drivers, passengers, and pedestrians injured or affected by a car accident caused by the insured driver, up to the coverage limits.

Drivers in Indiana can also choose to prove their financial responsibility in other ways. The Indiana Bureau of Motor Vehicles (BMV) will consider your duty fulfilled if you can provide one of the following:

• Insurance ID or policy declaration page, either in paper or electronic form (such as a photo on your phone)
• Surety bond: Issued when a licensed Indiana surety company promises to pay in your place when you are unable to do so. The bond should cover at least the amounts that a minimum insurance policy would pay for each accident.
• Cash/security deposit: A deposit of $40,000, either in cash or securities (such as a government bond or note), with the treasurer of state. In the event that you cause an accident, the amount of payment you are ruled responsible for will be deducted from this deposit.

If you are involved in a driving-related incident, such as a car accident or a serious traffic violation, the BMV may request proof of financial responsibility. In such cases, you will need to ensure that your insurance provider files a "Certificate of Compliance" (COC) with the BMV. This certificate demonstrates that you and your vehicle were insured to meet the state's minimum motor vehicle liability protection requirements at the time of the incident.

Uninsured/underinsured motorist coverage

In Indiana, uninsured/underinsured motorist coverage is not mandatory, but it is highly recommended. This coverage is designed to protect you if you are in an accident with a driver who does not have auto insurance or does not have enough insurance to cover the damages or injuries they caused.

Uninsured motorist coverage (UMC) will cover your injuries and the injuries of your passengers, as well as damage to your vehicle, if you are hit by an uninsured driver. Underinsured motorist coverage (UIM) will provide the same protection if you are hit by a driver who does not have enough insurance to cover the costs of the accident. These coverages are typically offered together and can be a valuable safety net in the event of a collision.

In Indiana, insurers are required to include these coverages in your initial quote when you are buying a policy for the first time. You do have the option to reject them in writing, but it is important to understand the risks involved. Without this coverage, you could be left paying for medical bills or vehicle repairs out of your own pocket if you are in an accident with an uninsured or underinsured driver.

Uninsured motorist bodily injury (UMBI) and underinsured motorist bodily injury (UIMBI) cover the medical bills for you and your passengers. In Indiana, insurers will typically provide UMBI coverage of at least $25,000 per person and $50,000 per accident, with higher limits often available. UIMBI will cover the difference between the other driver's bodily injury limits and your own limits, up to the maximum amount you purchased.

Uninsured motorist property damage (UMPD) and underinsured motorist property damage (UIMPD) cover damage to your vehicle in an accident with an uninsured or underinsured driver, respectively. UMPD coverage is typically offered at $10,000 or higher, depending on the insurer. UIMPD will cover the difference between the other driver's property damage limits and your own limits, up to the maximum amount you purchased.

While not mandatory, uninsured/underinsured motorist coverage can provide valuable financial protection in the event of an accident with an uninsured or underinsured driver. It is important to carefully consider your options and understand the risks involved before deciding whether to include this coverage in your auto insurance policy.

Penalties for driving without insurance

Indiana has strict penalties for driving without insurance, and the consequences can be severe. The state has a "no pay, no play" law, which means that if you are caught driving without insurance, you may face serious financial penalties and even have your car impounded.

For a first offence, you will have your driving privileges suspended, and will be required to carry a special type of insurance (SR22 insurance) for three years. You will also need to pay a reinstatement fee of $250 to $1000 to get your license back. The second offence results in a $500 fine, a one-year license suspension, and the SR22 requirement for three years. For a third offence, or any subsequent offences, the penalties increase to a $1000 reinstatement fee, a one-year license suspension, and the SR22 requirement for five years.

In Indiana, driving without insurance is not a felony, but repeat offences will result in higher fines and stiffer punishments, and could potentially lead to jail time.

Collision and comprehensive coverage

In the state of Indiana, drivers are required to carry liability auto insurance with certain minimum coverages. However, collision and comprehensive coverage are both optional and protect your vehicle from physical damage.

Collision Coverage

Collision coverage protects your vehicle in the event of a collision with another vehicle or object, including accidents with other vehicles, single-car rollovers, and collisions with stationary objects. It covers the cost of repairs or a full replacement of your vehicle, regardless of who was at fault. This type of coverage is particularly important if you drive frequently, especially in high-traffic areas, as your risk of being involved in an accident is higher.

Comprehensive Coverage

Comprehensive coverage, on the other hand, covers non-collision damage to your vehicle, such as theft, vandalism, fire, hail, animal damage, and weather damage. For example, if a tree falls on your car or it is damaged by a natural disaster, comprehensive coverage will come into effect. This type of coverage is ideal if you live in an area with a high risk of damage from fallen branches or animals.

Both collision and comprehensive coverage are typically required if you lease or finance your vehicle. While not mandatory, these coverages can provide valuable protection against unexpected incidents and help you avoid costly repairs or vehicle replacement.

When deciding whether to opt for collision or comprehensive coverage, consider the value of your vehicle, your current savings, and the likelihood of accidents or damage occurring in your area. If you have sufficient savings to cover potential repair or replacement costs, you may decide that additional coverage is unnecessary. However, for those with high-value vehicles or limited savings, collision and comprehensive coverage can provide peace of mind and financial protection.

Frequently asked questions