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Indiana Car Insurance Laws & State Minimum Coverage Limits

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UPDATED: Jan 25, 2019

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Indiana State FlagIndiana is one of the more affordable states for auto insurance, ranking 45th overall in 2017. Stated another way, Indiana the 7th cheapest state for car insurance, with premiums averaging $1021 per year.

The state shares a few similarities with other affordable states:

  • It’s a predominately rural state, with few major cities and plenty of space between them.
  • It’s a tort state, meaning that the insurance of the at-fault driver pays for the victim’s injuries (rather than the victim’s insurance paying those expenses).
  • It has conservative insurance mandates, meaning that a minimum/bare-bones policy in Indiana is cheaper than in a state with higher minimum requirements.

All of these factors, combined with Indiana’s middle-of-the-road averages for drunk drivers and uninsured motorists, help to keep costs reasonable.

Required Coverage & Limits

Indiana requires all vehicle operators to carry two main coverages:

  • Bodily Injury Liability – $25,000 limit per person and $50,000 per accident. This pays for injuries to other people when you are responsible for an accident.
  • Property Damage Liability – $25,000 per accident. This pays for damages that you cause to another person’s property, including vehicles. It does not pay for your own property. For example, if you hit your garage door with your car, PDL would not pay for damages to the garage or your vehicle; you would need to carry collision coverage for that. However, if another person drove into your garage door, his PDL would pay for your damages.

These are the only coverages required by law. However, the state requires all insurance companies to offer uninsured and underinsured motorist coverage:

  • Uninsured Motorist Bodily Injury (UMBI) – $25,000 per person or $50,000 per accident. This coverage takes the place of another driver’s liability insurance in the event that he is uninsured.
  • Underinsured Motorist Bodily Injury – $50,000 per incident. This goes hand-in-hand with UMBI. Under-insured motorist coverage comes into effect when a driver doesn’t have enough liability coverage to pay for the injuries he causes.
  • Uninsured Motorist Property Damage (UMPD) – $10,000 per incident. This takes the place of another person’s property damage liability insurance when that driver is uninsured.

You will need these coverages unless you sign a waiver accepting responsibility for your injuries and damages if you’re ever in an accident caused by a driver without insurance.

Special Notes About Indiana Auto Insurance

Tort State

Indiana is a “tort” or at-fault state. This means that a driver who causes a car accident is responsible for the medical expenses and property damages caused in a crash. If you are involved in an accident in Indiana, you are allowed to file a suit against the at-fault party for your medical expenses, lost work, pain and suffering, and related expenses. Similarly, you can find yourself on the receiving end of such a lawsuit if you are responsible for an accident.

The best way to cover your assets properly in a tort state is to carry an ample amount of liability insurance. If you are found to be at fault for a serious accident, the other party’s injuries can easily max out the state minimum of $25,000, leaving you personally liable for the extra amount. The more liability coverage you carry, the better your odds of avoiding personal financial responsibility. Additional liability insurance, like the umbrella policy (often added to homeowners insurance) can also help offset costs of very expensive claims.

Uninsured Motorist Property Damage

While most states offer and/or require Uninsured Motorist Bodily Injury (UMBI), not every state requires Uninsured Motorist Property Damage (UMPD) coverage. Indiana is one of 10 states where insurance companies are required to offer UMPD to their customers and a signed waiver is necessary in order to skip that coverage.

In a handful of states, UMPD is legally required. In the majority of states, UMPD is purely optional or not offered at all. (Source)

What exactly is covered by UMPD varies from one state to the next. Sometimes, the responsible driver has to be identified and proven to be uninsured for the coverage to apply. In Indiana, however, hit-and-run claims can be handled as uninsured motorist accident. If your vehicle is parked when its hit by an unknown driver, the claim can be handled under UMPD and the deductible will be waived.

Teen Driving Rules & Laws

Teens over the age of 15 can take a driver’s education class and receive a learner’s permit. This permit enables the teen to operate a vehicle while under the instruction of a licensed parent or guardian or another licensed driver over the age of 21.

In order to receive a learner’s permit at age 15, you will need to be enrolled in a driver’s education program, but you do not need to complete the program prior to obtaining a permit. You’ll also need to pass the written test before receiving the permit. If you are 16 or older, you do not need to take a driver’s education course, although you can if you wish.

A person must hold a permit for at least six months before obtaining a driver’s license. Drivers must log 50 hours of supervised driving, 10 of which should be at night, before taking the driver’s test to graduate to a provisional/probationary license. You will need to pass the driving test and have your guardian sign a log proving that you’ve completed driving practice.

If the driver is between the ages of 16 and 18, he will advance from a learner’s permit to a probationary license. Drivers over the age of 18 can receive a standard driver’s license immediately after passing the driving test.

Once you have your provisional license, there is a probationary period until you are 21 years old. During this time, for the first 180 days, you are not permitted to drive between 10pm and 5am. After 180 days you are not permitted to drive after 11pm Sunday to Thursday, earlier than 5am Monday through Friday, and between 1am and 5am Saturday and Sunday unless required by school/work or if you’re accompanied by a fully licensed driver age 25 or older. You also cannot have passengers in your vehicle during the probationary period unless you are accompanied by a licensed driver (25+). The exception to the passenger law is if you are driving your child, spouse or sibling.

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About Eric Stauffer

Author: Eric StaufferI am a former insurance agent and banker turned consumer advocate. My priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best place to get it.

3 Comments

  1. My husband was in the hospital in TN while visiting our children. We live in IN. I was parked in the parking garage while visiting my husband. When I went to my car I noticed that someone hit my van and did not leave any information or who did it. I called the police and a report was made. My Insurance agent told me that IN does not allow an agent to right hit and policy and that it is my responsibility to have to have it fixed with my 500 dollar deductible and not on my comprehension Insurance, Is this true?

    Reply
  2. Eric:

    I am a 20+ year insurance agent and CIC. I think that the state minimum limits are 45 years outdated and inadequate. Our policy in our agency is no less that $110/$300?$100 no exceptions. It always pains me to see a 3rd party claim with no or inadequate insurance when one of my clients is involved. I became more personal this week when a truck with minimum limits made a drive through out of my office while I was sitting at my desk. We have $60K damage to our building and probably $2K to the contents of which all will be submitted to our BOP to cover the damages less our deductible of $1,000 which we will never get back. Most other states have similar limits slightly higher or even lower. That is just plain wrong. If I recall the limits were set in Indiana back in the 1960’s? No consideration for inflation? What is wrong with our legislators? No one want to see their own carrier or themselves suffer a loss when it is not their responsibility yet no one seems interested in changing anything. Who are the big lobbyists if any that are behind this? There needs to be a voice that speaks out against this issue on moral grounds and if the excuse is the poor cant afford it that is BS because those people drive without it. 90% of the people that do keep insurance in force take the limits their agents recommend but unfortunately some agents think that to compete they need to write state minimum. Those agents should have their E & O docked. Care to comment?

    Reply
    • Hi Mike,

      I couldn’t agree with you more.

      I believe that state minimum liability insurance is lacking at best and criminal at worst. Some states have minimums so low that a policy may only cover $10,000 for injury to an individual.

      I actually wrote about in this car insurance guide.

      Best,
      Eric Stauffer

      Reply

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