Financial Responsibility in Indiana

All states have financial responsibility laws that require a motorist to show evidence of his or her ability to pay for damages arising out of an automobile accident. Usually such evidence of ability to pay is through automobile liability insurance. Proof most commonly must be shown at the time of registration, at the time of an accident and/or be kept at all times in a vehicle. In Indiana, a person who violates this law is subject to a 90-day suspension of the person’s drivers license and a $150 reinstatement fee.

Financial responsibility limits are divided into three areas and are often listed as follows: $25,000/$50,000/$10,000. The first two numbers refer to bodily injury limits and the third to property liability. The above example means coverage up to $50,000 for all persons injured in an accident, subject to a limit of $25,000 for bodily injury to or the death of one individual, and $10,000 for the damage to or the destruction of property in one accident. Indiana’s limits are approximately average in comparison to other states in the nation. More than half of the states currently have the same, or lower limits than does Indiana.

In 2003, the Indiana General Assembly passed new legislation to increase the penalties for those found in violation of the state’s financial responsibility laws. Previous Indiana law stated that first-time offenders faced a Class A infraction charge (up to a $10,000 fine) and suspension of their driving privileges of 90 days and a $150 fine for a license reinstatement. House Enrolled Act 1171 increased those potential charges to a Class C misdemeanor ($500 fine and up to 60 days in jail) if they knowingly and intentionally violated the law. Also, the legislation allows courts to suspend driving privileges for a year, but requires the suspension for a year if the driver has had another conviction in the last five years.