Last updated on April 26th, 2018
Indiana is one of many states that design state car insurance laws on the tort system, which requires that some driver must be found at fault whenever there is an accident involving two or more vehicle. This is directly in contrast to the no-fault system used by other states which does not require that one driver or the other be found liable for an accident. In Indiana, the driver that is found to be at fault in an accident is financially liable for any injuries or damages sustained by other drivers. In order to make sure that a driver will be able to pay if they are found to be at-fault in an accident the state of Indiana requires all vehicle owners to prove financial responsibility, which for most Indiana residents means purchasing mandatory minimum amounts of liability car insurance. Currently, the minimum levels of coverage are set at $25,000 for the injury or death of a single person and $50,000 for the injury or death of two or more people. The state of Indiana also requires that a vehicle be insured with at least $10,000 in property damage coverage that will reimburse other drivers for damage to their vehicle or personal property in an accident. The way Indiana handles uninsured and underinsured motorist insurance is a bit different from most other states. Although technically uninsured and underinsured motorist insurance is not a legal requirement in Indiana, a driver must opt out of this coverage by signing a written statement, otherwise both uninsured and underinsured motorist insurance will automatically added to every car insurance policy sold within the state matching the minimum amount of liability insurance purchased.
In addition to liability insurance there are a few other ways in which an Indiana driver can satisfy the state’s financial responsibility requirements though none will be as appealing to the average driver as purchasing a car insurance policy. One of the ways in which the financial responsibility requirements can be met is by making a deposit of $40,000 with the state treasurer. A trust fund with a value of at least $40,000 will satisfy state financial responsibility requirements as well. In both cases these alternative measures act as a sort of self insurance, or proof that the driver has the financial resources to cover the cost of any at-fault accident. Drivers also have the option of purchasing a surety bond instead of buying liability car insurance though like the cash deposit or trust fund purchasing a surety bond is a much too expensive option for the average Indiana resident. In order to register a vehicle in the state of Indiana the vehicle owner must be able to provide the state with some sort of proof that they have satisfied Indiana’s financial responsibility law. Without this proof a vehicle cannot be legally registered in the state and license plates will not be issued or renewed.
According to Indiana state law not only does the owner of a vehicle have to comply with the state’s financial responsibility regulations the driver of a vehicle must also carry proof of this compliance with them at all times. For driver that purchased a liability car insurance policy that meets Indiana’s standards this means carrying an insurance card issued by the insurance company. Every driver in Indiana is required to produce proof of insurance any time they are pulled over or are involved in an accident. If a driver cannot provide a law enforcement officer with this proof at the time of the incident they will be sent a certificate of compliance, which states that the driver did actually have insurance at the time of the incident, by the Indiana Bureau of Motor Vehicles that will have to be filled out by the driver’s insurance agent within 40 days. If a driver cannot complete this certificate of compliance they will face the same penalty as any other driver in the state that is found to be driving without car insurance.
Indiana residents that are caught driving without insurance will typically face a 90 suspension of their driver’s license. A subsequent offense within a three year period could result in a full 12 month suspension of the driver license. Each time the license is suspended due to driving without insurance the driver will also have to pay a fine in order to have their license reinstated. For a first offense the fine is set at $150 but jumps up to $225 for the second offense and $300 for a third offense. Valid proof of insurance will also be required before a driver can have their license reinstated. Repeat offenders may be required by the state to carry an SR-22 form that is issued by the insurance company which will ensure that a driver has had continuous car insurance coverage on a vehicle during a specified period.