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Uninsured and Underinsured Car Insurance Coverage in Indiana

Updated May 23, 2020 | By Wilson Kehoe Winingham staff

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.

Uninsured and Underinsured Coverage

In order to promote opportunities 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 underinsured motorist (UM//UIM) 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 they 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 underinsured motorist coverage, the coverage must be made available in limits not less than $50,000 and providers may not sell or provide any underinsured motorist coverage less than that. Furthermore, at the insured’s option, the bodily injury liability limit may be required to be equal to the underinsured motorist coverage. Any policies issued after 1995 may offer UM/UIM coverage in an amount greater than the limits of liability in the bodily injury and property damage liability provisions of an insurers’ policy.

Difference Between Uninsured and Underinsured

There is a significant difference between an uninsured and underinsured vehicle. An uninsured motor vehicle is a 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 underinsured 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 underinsured motorist coverage at the time of the accident.

How the Courts Address Insurance Coverage

In Progressive Halcyon Insurance Co. v. Petty, the court addressed how to determine if UIM coverage applies. The plaintiff filed an 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 the UIM per accident limits of plaintiff’s policy were identical to defendant’s bodily injury liability limits, so 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.

Motorists vs. Vehicles

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. The plaintiff then sought UM benefits under his auto insurance policy, because the defendant was uninsured at the time of the incident.

The policy for UM 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.

Courts have been expanding what is recoverable under UM/UIM claims. 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 UIM coverage for all damages for bodily injury to one person.

Contact an Automobile Accident Attorney Today

If you or a loved one have been injured as a result of a car crash, you are urged to contact the attorneys of Wilson Kehoe Winingham. An Indianapolis car accident lawyer from WKW can help you get the compensation you deserve. Call 317.920.6400 or fill out an online contact form for a free, no-obligation case evaluation.

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