Indiana Car Insurance Laws

If a resident of the Hoosier State wishes to operate a motor vehicle legally, he or she must maintain continuous financial protection for the vehicle by purchasing or renewing an Indiana auto insurance policy or by depositing $40,000 with the treasurer of state.

Minimum Liability Requirements

In order for a policy to satisfy the state's financial responsibility laws, it must include a minimum amount of protection.

The Indiana auto insurance laws require that a protection plan provide for at least $25,000 in bodily injury liability per person and $50,000 total per accident. For property damage liability, it must provide at least up to $10,000 worth of protection.

Uninsured and underinsured motorist coverages are typically included, but policy-buyers may opt to decline in writing this portion of a protection plan.

Penalties for Driving Uninsured

There are no direct fines for driving without coverage in Indiana, but motorists who are uninsured and get into an accident will be responsible for paying for the damages they cause and may also have to pay indirect fees as a result of their being uninsured.

If a motorist is caught driving without insurance in the state, he or she could be convicted of a Class A infraction. As a result of such a conviction, the courts can suspend the offender's driving privilege for up to one year. When that period is up, the motorist will have to provide evidence of financial responsibility and pay a reinstatement fee. The reinstatement fees are $150 for a first suspension, $225 for a second suspension and $300 for a third.

Points can also be added to an Indianan's driving record if he or she is caught driving without a policy in place.

Uninsured Database

As of January 2010, residents who are caught on the road with proper automobile insurance coverage in place also get entered into the state's Previously Uninsured Motorist Registry.

Offenders stay in the registry for the five years following a conviction. The state goes through the database regularly and randomly selects registrants to ask to verify whether they currently have financial protection in place. If a registrant does not respond to these inquiries, it is assumed that he or she is uninsured.

The Insurance Research Council estimated that, in 2009, about 1 in 6 drivers in the state were uninsured.

Laws Regarding Cancellations

Indiana law places restrictions on when and for what reasons an insurer can cancel a protection plan. For the first 60 days, insurers can cancel them for any reason. Between the 60-day threshold and the end of the coverage period, though, they can only cancel it for reasons such as failure to pay premiums or loss of license.