/ Blog/ Uninsured & Underinsured Insurance Coverage in Indiana
Having an automobile accident in Indiana can become a significant financial burden for an injured person. This burden can be compounded when the at-fault party does not have insurance or does not have an insurance policy sufficient to cover damages. Under Indiana law all drivers are required to have what is known as 25/50/10 coverage, meaning a minimum coverage of $25,000 for each person for bodily injury, minimum liability limit of $50,000 for each accident, and a minimum of $10,000 in coverage for property damage. However, despite these laws, there are still cars on the road who are either uninsured or under insured. Therefore, in order to promote opportunity for innocent individuals to recover for damages in the event of an accident with another driver who is not properly insured, Indiana requires that auto insurance providers to provide their customers uninsured and under insured motorist coverage, for either a single premium or for separate premiums, in limits at least equal to the limits of liability specified in the bodily injury liability provisions of an insured’s policy. If the insured chooses not to purchase this coverage, the law requires that he must explicitly reject or waive the coverage in writing. The court has previously interpreted the UM/UIM statute to require an offer, not merely the accessibility to coverage. The law also specifies that for under insured motorist coverage, the coverage must be made available in limits not less than $50,000 and providers may not sell or provide any under insured motorist coverage less than that. Furthermore, at the insured’s option, the bodily injury liability limit may be required to be equal to the under insured motorist coverage. Any policies issued after 1995 may offer uninsured or under insured motorist coverage in an amount greater than the limits of liability in the bodily injury and property damage liability provisions of an insurers’ policy.
There is a significant difference between an uninsured and under insured vehicle. An uninsured motor vehicle means a motor vehicle without liability insurance or one that doesn’t have the required 25/50/10 coverage or any similar requirements applicable under the law of another state. However, an uninsured motor vehicle can also be an insured motor vehicle where the liability insurer of the vehicle is unable to make payments within the 25/50/10 limits because of insolvency of the insurance company within two years of the accident. In a hit-and-run case the driver would be considered an “uninsured” motorist as well. On the other hand, an under insured motor vehicle is an insured motor vehicle where the limits of coverage available for payment to the insured under all bodily injury liability policies, covering persons liable to the insured, are less than the limits for the insured’s under insured motorist coverage at the time of the accident.
In Progressive Halcyon Insurance Co. v. Petty the court addressed how to determine if under insured motorist (UIM) coverage applies. The plaintiff filed and action against her UIM insurer to recover for personal injuries from the accident. The passenger also made a similar claim. The defendant had a liability insurance policy that provided limits of $50,000 per person and $50,000 per accident. Her policy contained UIM limits of $50,000 per person and $50,000 per accident. Even though both she and the passenger were suing under the policy, the insurance company argued that because the UIM “per accident” limits of plaintiff’s policy were identical to defendant’s bodily injury liability limits, the defendant was not an UIM under its policy. The appellate court held that summary judgment should be granted to the insurer because the insured would have recovered the same total amount as would recover if the defendant was uninsured ($50,000), so the defendant didn’t qualify as a UIM. According to the court, if the per-accident limits are identical, then no UIM exposure remains.
Additionally, it is important to note the difference between a motorist and a vehicle and that the statute requirement that coverage be offered applies to the status of the car and not the driver. In Whitledge v. Jordan, 586 N.E.2d 884 (Ind.Ct.App.1992), the plaintiff was using an automobile owned by his mother and insured under a liability insurance policy. While the car was parked at the plaintiff’s work he saw two individuals, one of whom was the defendant, trying to steal the car. The plaintiff attempted to stop the defendants and in the process got caught in the driver’s shoulder harness. The defendant drove the vehicle forward for some distance and the plaintiff was injured. He then sought uninsured motorist benefits under his auto insurance policy because the defendant was uninsured at the time of the incident. The policy for uninsured motorists provision excluded coverage for any vehicle “owned by or furnished or available for the regular use of you or any family member.” The trial court granted summary judgment in favor of the insurance company. On appeal Whitledge attempted to argue that defendant was an uninsured motorist operating an uninsured auto because, although the policy applied to the plaintiff’s mother, the auto was uninsured as to defendant because the defendant stealing the car obviously did not have permission to use the automobile. The court recognized that the pivotal issue in the case was whether the uninsured motorist statute required protection when the vehicle is uninsured or when the motorist is uninsured. Stating that our statute defined an uninsured vehicle as a vehicle without liability insurance, this court held that the vehicle was insured and that the trial court correctly denied uninsured motorist benefits.
The plaintiff in Whitledge also argued that the trial court erred in upholding an insurance clause and the clause should be void as against public policy, but the court disagreed. I.C. § 27-7-5-2 mandates insurers to make available uninsured motorist insurance in their liability policies. The purpose of uninsured motorist coverage is to put the injured insured party in substantially the same position as if the offending party had complied with the required 25/50/10 coverage. The court stated that “any language in the insurance policy which limits or diminishes the protection required by statute is contrary to public policy. The statute is violated when the policy specifically limits uninsured motorist coverage as to persons who would otherwise qualify as insured for liability purposes.” Since the plaintiff would not have qualified for liability coverage due to an exclusion which states that the policy does not provide liability coverage for any person for bodily injury to the policyholder or any family member. (This sort of clause was upheld in Transamerica Insurance Co. v. Henry as not violating the Indiana uninsured motorist statute or the policy of the state.) All the reasoning in Whitledge was upheld in Greenfield v. Allstate Personal Property. There court held that an insurer did not violate requirements of the uninsured motorist statutes by failing to cover an accident caused by an uninsured motorist operating an insured vehicle, under the policy’s uninsured motorist provision.
Courts have been expanding what is recoverable under the uninsured and under insured claims. In State Farm Mut. Auto. Ins. Co. v. Jakupko 881 N.E.2d 654 (Ind.,2008) held that an insured passengers’ emotional distress as result of automobile accident was “sickness” and, thus, “bodily injury” within the meaning of automobile policy and its “each person” limit of under insured motorist (UIM) coverage for all damages for bodily injury to one person.
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