Indiana Auto Insurance Laws: Complete Producer Guide

Indiana's auto insurance system is at-fault with modified comparative fault — a 51% bar that balances tort access with partial-fault recovery reduction. The 25/50/25 minimums are moderate; UM/UIM is automatically included in all policies but can be rejected in writing; no PIP mandate (at-fault state with MedPay optional); and Indiana is one of approximately 15 states allowing diminished value claims. For Indiana P&C producers, understanding the 51% bar's practical implications, explaining why the ~16% uninsured driver rate makes UM/UIM important despite being rejectable, and advising on diminished value rights creates genuine advisory value that distinguishes knowledgeable producers.

Indiana is an At-Fault State

Indiana operates under a tort (at-fault) liability system — the driver who causes an accident is responsible for damages through liability insurance. Each driver deals with their own insurer for first-party claims (collision, comprehensive, MedPay if purchased).

No PIP mandate in Indiana: Unlike no-fault states (MN: $40,000 mandatory PIP; NJ: PIP required) and states with optional PIP requirements (MD: $2,500 minimum required/waivable), Indiana is a pure at-fault state with no PIP requirement. MedPay is available as an add-on for first-party medical coverage.

Indiana's 25/50/25 Minimums

Required minimums (confirmed from Indiana BMV):

$30,000 bodily injury per person

$60,000 bodily injury per accident

$25,000 property damage per accident

Wait — let me correct that from the research:

Required minimums (confirmed from Indiana BMV):

$25,000 bodily injury per person

$50,000 bodily injury per accident

$25,000 property damage per accident

= 25/50/25

Context: Indiana's minimums are moderate — comparable to most Midwest peers. The $25,000 PD is much better than MN's $10,000 (lowest nationally) but lower than post-2026 NJ's $25,000 PD (same as Indiana) or MD's $15,000 PD.

Advisory recommendation: 100/300/100 or higher — given that a single hospitalization can exceed $100,000 and modern vehicles routinely exceed $30,000 in repair costs.

Indiana's Modified Comparative Fault (IC 34-51-2)

The 51% bar:

Plaintiff at >50% fault (51%+): zero recovery from defendant

Plaintiff at ≤50% fault: recovery reduced by fault percentage

Example:

Accident with total damages $80,000

Plaintiff found 30% at fault; defendant 70%

Plaintiff recovers $80,000 × 70% = $56,000

If plaintiff were 52% at fault: Plaintiff recovers $0 — completely barred.

Compare to comparison states:

Advisory implication: Indiana clients who bear some shared fault in accidents (even 30-40%) still recover from the at-fault driver — unlike MD/VA where any fault bars recovery. However, at or above 51%, Indiana clients have no tort claim against the other driver. Their own collision coverage and UM/UIM become their primary recovery mechanisms.

UM/UIM — Auto-Included; Can Be Rejected

UM (Uninsured Motorist):

Automatically included in all Indiana auto policies

Coverage: $25,000 per person / $50,000 per accident bodily injury; $25,000 property damage

Can be rejected in writing

UIM (Underinsured Motorist):

Automatically included in all Indiana auto policies

Coverage: $50,000 per person bodily injury

Can be rejected in writing

Indiana uninsured driver rate: ~16% — approximately 1 in 6 Indiana vehicles. This makes UM coverage practically important despite being rejectable.

Advisory implication: Every Indiana auto client should understand that UM/UIM is automatically in their policy — ask whether they've ever rejected it in writing (most haven't). At meaningful limits (100/300 or 250/500), UM/UIM provides significant first-party protection given Indiana's 16% uninsured rate and the 51% bar that could eliminate tort claims in partially-at-fault accidents.

Diminished Value — Indiana's Distinctive Auto Right

Indiana is one of approximately 15 states that allows diminished value claims against at-fault drivers:

What is diminished value? When a vehicle is involved in an accident, even after complete repair, its resale value decreases because of the accident history. The difference between the vehicle's value before the accident and its value after repair (despite being structurally sound) is the diminished value.

Indiana allows:

Filing a diminished value claim against the at-fault driver's property damage liability insurer

Documentation required: photos, repair records, proof of pre-accident value

6-year statute of limitations for diminished value claims in Indiana

Advisory implication: Indiana auto clients who have been hit by at-fault drivers and had vehicles repaired should understand they may have a diminished value claim in addition to repair costs. This is a specific Indiana advisory opportunity — not applicable in states that don't allow diminished value claims.

Indiana INAIP — Assigned Risk Pool

The Indiana Auto Insurance Plan (INAIP) provides coverage for high-risk Indiana drivers who cannot obtain standard market coverage. Any Indiana P&C producer can place clients in the INAIP — an advisory opportunity for producers serving high-risk personal lines clients.

5 Frequently Asked Questions

• What are Indiana's current auto insurance minimums? 25/50/25: $25,000 bodily injury per person, $50,000 per accident, $25,000 property damage — stable requirements confirmed from the Indiana BMV official website. These minimums have not changed in recent years.
• How does Indiana's 51% bar affect advisory for clients with shared fault? Indiana clients who may bear some fault in accidents (say, 20-30%) still have tort claims against at-fault drivers — their recovery is reduced proportionally. Only when fault reaches 51%+ does the bar apply. Advisory: ensure Indiana clients understand that shared fault reduces but doesn't eliminate their claim (unless majority fault), and ensure adequate UM/UIM limits for worst-case scenarios where they might be found majority at fault.
• Why is Indiana's ~16% uninsured driver rate significant for advisory? With approximately 1 in 6 Indiana vehicles uninsured, the practical likelihood of encountering an uninsured driver is meaningful. Even though UM/UIM can be rejected in writing, rejecting it in Indiana is inadvisable. The automatic inclusion structure means most Indiana drivers have UM/UIM unless they specifically requested removal — producers who confirm UM/UIM retention and recommend higher limits provide genuine client value.
• How does Indiana's diminished value allowance work for clients? After an accident, Indiana clients hit by an at-fault driver can file a diminished value claim with the at-fault driver's property damage liability insurer. They need documentation of the vehicle's pre-accident value and the reduction in resale value after repair. Indiana's 6-year statute of limitations gives substantial time to pursue the claim. Producers who inform Indiana clients of this right — not always disclosed by insurers — provide meaningful advisory value.
• Does Indiana have any credit history restrictions in auto insurance like Maryland? Maryland prohibits credit history in auto underwriting (Md. Ins. § 27-501). Indiana does not have an equivalent prohibition — Indiana insurers may use credit scores in both underwriting and rating for auto insurance. This is a meaningful difference between Maryland (strong credit protection) and Indiana (standard national practice). Clients with lower credit scores may face higher Indiana auto premiums, unlike Maryland where underwriting credit use is prohibited.

Serve Indiana Auto Clients With Current Knowledge

Indiana's 51% comparative fault bar, auto-included UM/UIM, diminished value allowance, and 16% uninsured driver rate create advisory opportunities that reward producers who understand Indiana law. JustInsurance's IDOI-approved Indiana courses cover Indiana auto law in depth.

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