All states have financial responsibility laws requiring motorists to show evidence of their ability to pay for damages in the result of an automobile accident. The most common way to show proof of the ability to pay is by buying vehicle liability insurance. Violating the Financial Responsibility Law in the Hoosier State is a serious offense, with stiff penalties.
Indiana’s Financial Responsibility Law
In 2003, to combat motorists driving irresponsibly, the Indiana General Assembly passed a law making it tougher on you if do not comply with the Indiana Financial Responsibility Law. Prior to the law, it was a Class A infraction. Under the Financial Responsibility Law, it is now a Class C misdemeanor, which means being fined $500 fine and serving up to 60 days in jail. This does not include court administrative costs that you may be assessed.
Also, the law states that courts have the right to suspend driving privileges for a year; if you have had another conviction in the past five years, the court is required to suspend your driving privileges for a year.
According to the Indiana Department of Insurance (DOI), every Indiana auto insurance liability policy must include uninsured and underinsured motorist’s coverage. You can reject this coverage, but it must be done in writing. The minimum auto insurance liability limits in Indiana are:
$25,000 – Bodily injury, one person, Uninsured Motorist (UM), if you opt for UM/UIM
$50,000 – Bodily Injury, one accident, Uninsured Motorist (UM), if you opt for UM/UIM
$10,000 – Property damage
$50,000 – Bodily Injury, Underinsured Motorist (UIM), if you opt for UM/UIM
With UM/UIM coverage, your policy allows you to collect damages from your own insurance provider.
Proof of insurance
If you are stopped by an Indiana law enforcement officer, you must show proof that your vehicle is insured for at the minimum amounts. This is most easily done through showing your insurance identification card. You must also provide proof of auto insurance at the time of registering your vehicle and at the time of an accident.
If you are renting a vehicle in the Hoosier State, rental car companies must provide the state required minimum amount of liability insurance. Contact your auto insurance agent or company to find out what coverage you carry when driving a rental car. Also, some credit card companies offer rental car coverage. Find out if yours does. You can waive the rental car company’s coverage by signing a Collision Damage Waiver, in the event either your credit card or your personal auto insurance policy includes the minimum amounts of coverage for rental cars.
Who is liable
Like many states, Indiana has a fault-based system of auto insurance. This means that the person who caused the accident is responsible for the costs arising from the accident. This includes, but is not limited to, medical treatments, rehabilitation and damages to the vehicle. Fault is initially assessed by the driver’s insurance company; however, many cases are ultimately resolved in court.
Average annual cost of insurance
The 2011 average annual premium for Indiana auto insurance is $1,518, according to Insure.com.
Most insurance companies offer auto insurance discounts. The Insurance Institute of Indiana suggests that you speak with your agent or insurance company to see if you are any of the members of your family quality for any of the following potential discounts, or if your company may offer additional discounts:
- Discount for multiple autos. This is usually available to those who insure two or more cars with the same company.
- Discount for carrying multiple policies with the same company. This is available from some companies to individuals who carry home, life or health insurance policies, in addition to their auto insurance, with the same company.
- Discount for safety features. Although some companies have discontinued anti-lock brakes (ABS) discounts because of a lack of evidence showing that ABS reduces claims, ask your agent if any discounts are available for vehicles with airbags, ABS or other safety features.
- Discount anti-theft devices such as car alarms. This discount is available from most companies to auto-owners who equip their cars with alarms or disabling devices that reduce the possibility of theft.
- Discount for completing a state-approved senior driver defensive course. Auto insurance companies frequently offer a discount to Senior drivers 60 and older who complete an accident prevention course.
- Discount for only driving short distances. If you limit the mileage you drive and are only driving a short distance (a few miles), say for example to take public transportation to your job or to carpool, ask if your insurance company offers a mileage discount.
- Discount to students for good grades. Limited to high school or full-time college students, ask if your insurance company gives discounts if the eligible students in your family maintain a grade average of B or better.
It pays to be smart when shopping for auto insurance in Indiana!