Indiana Auto Insurance Laws, Minimums, Requirements

What mandatory auto insurance laws exist in Indiana?

• Indiana has a Financial Responsibility Law in place, which requires that all drivers have the ability to pay for any and all costs incurred as a result of an accident if they are found to be at fault. Indiana driver’s can demonstrate proof of financial responsibility through a filing of a bond or a certificate of self-insurance. Indiana drivers can also have a deposit of $40,000 in cash or securities held by the state. The best way to prove financial responsibility, however, is by carrying the state’s minimum liability coverages.
• In the state of Indiana, the minimum liability coverages are $25,000 per injured person up to $50,000 per accident, and $10,000 of property damage insurance.
• If you are caught driving without insurance, your license will be suspended for 90 days. The first offense carries a $150 reinstatement fee, and the second offense carries a 90- day license suspension, and a $225 reinstatement fee. Third offenses or more will cost you your license for 90 days and a $300 reinstatement fee. If you violate Indiana auto insurance laws twice within the same year, you will lose your license for a year.

What is the Minimum Liability Coverage (Bodily Injury amounts per person, per accident, and property damage amounts):

If you buy automobile insurance in Indiana, your policy must include minimum liability coverage of:

$25,000 per injured person up to $50,000 per accident
and
$10,000 for property damage

What are the Rental Car Insurance Requirements?

In the state of Indiana and the vast majority of other states, rental car companies must provide the state required amount of liability insurance. This will cost you anywhere from $7-$14 a day. If your personal auto insurance policy includes the minimum amounts of coverage for rental cars or your credit card offers coverage, you can waive the car rental company’s coverage by signing a Collision Damage Waiver (CDW).

What are the rules pertaining to Uninsured/Underinsured Motorist Coverage?

Each newly written Indiana auto liability policy must include uninsured and underinsured motorist’s coverage unless the policyholder rejects it in writing. Minimum liability limits are:

Uninsured Motorists: Bodily Injury: $25,000/$50,000
Property Damage: $10,000
Underinsured Motorists: Bodily Injury: $50,000 (if you opt for UM/UIM)

The uninsured and underinsured motorists coverage allows you to collect these damages from your own insurance company.

What are the rules pertaining to the exclusion from coverage of a driver living in household?

In the state of Indiana, a household exclusion clause in an automobile liability insurance policy is permitted under state law. Certain household exclusions free the insurance company from the responsibility of paying a claim. Because of this, it is important to examine your auto insurance carefully before you sign on the dotted line.

What are the rules regarding whether a driver has prior insurance? That is, how does state law handle it if a driver has no prior insurance or has let their previous insurance lapse?

In the state of Indiana, it you allow your insurance policy to lapse, you are driving without insurance. If you are caught driving without insurance, the penalties are stiff. You could end up paying $150-$300 in reinstatement fees and you could lose your license for 90 days up to a year. In addition to expensive fines and license suspension, Indiana motorists who allow their policies to lapse for any reason often must pay an initial 25%-50% percent surcharge for a new policy.

What are the rules and guidelines auto insurance companies must follow regarding the use of Personal Credit History in selecting applicants and setting rates?

In the state of Indiana, insurance companies are permitted to use Personal Credit History, specifically credit scores, to select applicants and set rates. Other factors Indiana auto insurance companies may use to determine rates and product offers include:

Age and Sex
Car Use
Claims History
Deductibles
Driver Record
Driver Training
Marital Status
Place of Residence
Policy Limits
Type of Car

Is the state a No Fault or Tort state? What does either mean to the policy owner?

The state of Indiana follows a Tort liability system, so there are no restrictions on lawsuits. What this also means is, if you are involved in an accident, someone must be found to be the cause or fault of the accident. The person deemed at fault is responsible for all damages. Damages are usually handled through the at-fault person's insurance company. Because Indiana is a Tort state, most insurance companies recommend that driver’s consider carrying higher coverages than the state minimums. 

What is the average auto insurance premium in this state? As of what year?

As of 2006, Indiana resident’s average insurance premium was approximately $631 the 43rd most expensive in the nation. This was down 4.0%  from the previous year. The national average was $817.

Sources

Insurance Information Institute

Indiana Department of Insurance