Indiana Car Insurance Laws & State Minimum Coverage Limits

Indiana car insurance laws require minimum liability rates of 25/50/25 for bodily injury and property damage coverage. Indiana is a “tort” or at-fault state, meaning that a driver who causes a car accident is responsible for the medical expenses and property damages caused in a crash.

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Eric Stauffer is a former insurance agent and banker turned consumer advocate. His 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.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Jul 21, 2020

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Indiana State Flag

Indiana 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.

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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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